Dubai Real Estate Sales Surge 35% Driven by Off-Plan Sales

Off-plan sales have played a pivotal role in residential sales in the two largest real estate markets in the UAE, positively impacting sales in Dubai while negatively influencing the market in Abu Dhabi.

Dubai: Strong Growth in Property Sales and Rentals

Dubai has experienced remarkable growth in off-plan property sales, which surged by over 50% year-on-year in the third quarter, contributing to a 35% increase in total sales transactions during the first nine months.

This growth is fueled by rising demand surpassing the supply growth rate, raising the proportion of lease renewals to 62% of total contracts, with a 14% increase in rental values.

The entry of approximately 13,500 new units into the market in the fourth quarter is expected to stabilize prices. Villa rents have risen by 86% since the pandemic, reflecting the market's strength and responsiveness to growing demand.

Additionally, the report noted that Dubai property prices have outpaced those in London and Singapore since 2019. The market is projected to add around 90,000 new residential units over the next two years. According to the Head of Research for the Middle East and Africa at JLL, demand is expected to outstrip supply until 2027, when the completion of current projects will achieve balance.

Abu Dhabi: Decline in Off-Plan Sales and Increased Demand for Luxury Properties

In contrast, Abu Dhabi recorded a sharp 67% decline in off-plan property sales during the third quarter, leading to a 44% drop in total sales transactions in the first nine months.

However, the secondary market showed notable improvement, with a 44% rise in sales transactions and an 8% increase in prices compared to the previous year.

Rental growth in Abu Dhabi reached 9% for apartments and 4% for villas. According to the JLL report, luxury property demand is expected to continue outperforming other segments during the last quarter of the year.

Performance of Other Sectors: Hospitality, Offices, and Retail

1. Hospitality Sector: Revenue per available hotel room in Abu Dhabi increased by 23% through September.
2. Office Spaces: Lease contracts in Abu Dhabi grew by 44%, while rents in Dubai rose by 15%.
3. Retail Sector: Major shopping centers in Dubai saw a 15% increase in rents, compared to 9% in Abu Dhabi.
4. Industrial Units: Lease transactions increased by 8% in Dubai and 33% in Abu Dhabi, with rents rising by 13% and 8.6%, respectively.

In Summary...

The JLL report highlights a clear contrast between Dubai and Abu Dhabi, with the former leading growth supported by strong demand while the latter focuses on enhancing property quality and catering to foreign buyers' demands. With new projects continually being launched, market dynamics are expected to keep evolving to meet the needs of diverse customer segments.

Edited by: Imtilak Global©