The real estate boom in the UAE is expected to gain added momentum over the next six months with Dubai, Abu Dhabi and other emirates primed to witness a steady stream of new project launches.
The continued buoyancy in the sector is underpinned by increasing housing demands across diverse segments of the population on the back of proactive government initiatives geared towards fostering the expansion of the real estate sector, a leading real estate services company said.
Asteco said in its Q3 2023 Real Estate Report that the real estate market in Abu Dhabi, having recorded the delivery of 1,000 residential units in Q3 2023, is expected to see the launch of several new projects, including residential, commercial, and mixed-use developments. In addition, there are more projects that are in the planning/design stage with official announcements expected in the next six months, the report said.
In Q3, Abu Dhabi saw the launch of key projects such as Gardenia Bay on Yas Island, Vista 3 on Al Reem Island, Perla 3 in Yas Bay, Al Jurf Phase 2 in the Ghantoot area, Murjan Saadiyat on Saadiyat Island, Icon Tower in Yas Bay, as well as a new phase of Sadiyaat Lagoons, said the report.
Abu Dhabi’s rental market recorded annual growth rates of 3.0 per cent and 4.0 per cent for apartments and villas respectively. Average apartment rental rates recorded marginal growth over the quarter, but prime and high-end developments measured notable increases ranging from 4.0 per cent to 6.0 per cent. On an annual basis, these rates nearly reached 10 per cent compared to the same period last year, the Asteco report said.
In Dubai, Asteco notes that almost 6,250 residential units were delivered over Q3 2023, including 4,700 apartments and 1,850 villas. Although this signifies a moderate decline compared to previous quarters, it remains a substantial volume. It is anticipated that over 130,000 new dwellings would be delivered in the next three to four years.
“Rising demand for office space is likely to usher in new commercial launches in the foreseeable future. The handover of Uptown Tower, a 500,000 sqft Grade A development in Jumeirah Lakes Towers (JLT), presents a significant milestone. Additionally, the impending delivery of Innovation One in Dubai International Financial Centre (DIFC) further underscores the market’s dynamism,” the report said.
Sharjah Real Estate Registration Department (SRERD) reported 59,258 real estate transactions for the first nine months of 2023, a 15 per cent increase compared to the same period last year. Ajman’s Department of Land and Real Estate Regulation noted a 61.5 per cent year-on-year growth in real estate transactions for August 2023, underlining the region’s expanding market dynamics. The emirate’s office rental rates recorded a marginal 1.0 per cent rise over the last three months “due to enhanced market sentiment and business expansion.”
Al Ain’s real estate market continued to exhibit robust demand across all asset classes, indicating positive overall market sentiment. After a period of stagnant rental growth, recent data highlights a notable increase in rental rates for good-quality villas, ranging from 3.0 per cent to 5.0 per cent on average over the quarter. In addition, rental rates for high-quality office space increased by an average of 2.0 per cent in the third quarter.
In terms of new supply, several residential buildings were handed over in different areas of Al Ain, mainly concentrated in the Town Centre areas. “These developments, coupled with the evolving rental landscape and increasing demand, signify a positive trajectory for the Al Ain real estate market,” said the report.