Experts at a panel discussion foresee the UAE’s real estate sector continuing its upward trajectory in 2024, despite a softening global outlook. Dubai and Abu Dhabi are expected to deliver approximately 34,000 units and 8,000 units, respectively.
Panelists highlighted robust economic fundamentals, government initiatives, and increased investor confidence as key factors driving new opportunities for sustained growth across asset classes in the UAE’s rapidly evolving market. These factors are expected to contribute to growth, particularly in the short and medium term. This analysis was shared during JLL’s event titled “Navigating the Growth Spectrum: Exploring Strategies for Sustained Success.”
Positive Outlook and Upward Trends
The panelists anticipate that the real estate sector will maintain its upward momentum, leveraging the strong growth and high levels of buyer demand witnessed in 2023.
James Allan, CEO of Middle East and Africa (MEA) at JLL, emphasized that a robust and resilient real estate industry has become a cornerstone of the UAE’s diversification agenda. He expressed confidence in the sector’s ability to deliver a strong performance in 2024, even amid inflationary pressures.
The panelists emphasized that the positive outlook for growth and upward trends in the investment climate provide stability amidst global uncertainty, reaffirming the UAE’s attractiveness for regional and international real estate investors.
Residential Market Trends
During the panel discussion, the experts estimated that despite annual increases in both the value and volume of transactions in the residential segment, the pace of growth is expected to slow down in the coming year.
Even as luxury stays a niche segment, branded residences, wellness, and lifestyle-oriented real estate projects enjoy solid development alongside co-living areas that deliver affordable, convenient, and inclusive living solutions for young and single professionals, they argued.
“Despite escalating land prices and construction costs, the positive momentum of the UAE’s residential market is expected to continue in 2024 with Dubai and Abu Dhabi anticipated to deliver approximately 34,000 units and 8,000 units respectively,” they said.
According to Property Monitor, a prominent real estate technology and market intelligence provider, Dubai’s vibrant residential market is set to witness the handover of more than 40,000 units in 2024. This surge follows the launch of close to 100,000 new units in 2023. The housing sector, which saw the largest annual price increase of 16.4 percent in over a decade last year, will continue to contribute to the robust pipeline of supply expected to be delivered in the coming years, as outlined in a recent report by Property Monitor.
GCC Region’s Prospects and UAE’s Position
Speakers at the JLL panel event highlighted that with the increase in private and sovereign wealth, along with elevated infrastructural spending, there are brighter prospects for the real estate sector across the wider GCC region. This region is considered less sensitive to global challenges such as inflation and interest rate hikes.
“The positive sentiment and performance of various macroeconomic indicators reflect trust and resilience both in the UAE and GCC markets, even as Dubai continues its run as a dominant force in the region’s property sector,” said the JLL experts.
Investment Opportunities and Asset Classes
The panelists noted that the UAE’s position as a financial and business hub has bolstered demand across major asset classes, with global institutions actively seeking investment opportunities in the country. They highlighted that residential, hospitality, and office segments remain top performers in the UAE, driven by its high desirability index. Additionally, the commercial real estate sector presents a competitive landscape with supply-demand gaps for high-quality spaces. Core asset classes continue to attract interest in the UAE’s capital market, with asset managers pursuing aggressive pricing strategies, resulting in prime office and hospitality yields nearing the 7.0 percent threshold.
Sustainability and Technological Innovations
The audio system additionally emphasized an expanded cognizance of sustainability and technological improvements, which might be reshaping the actual property landscape. Green building practices and strength-green designs are gaining prominence and are considered important in the market. Financial establishments have increased their competitive lending services to assist green initiatives, reflecting the developing significance of sustainability inside the real estate sector.
Dubai’s Residential and Office Market Trends
Dubai has witnessed increased luxury off plan property launches, with developers focusing on meeting the demand for affordable housing options. The residential segment below Dh3 million is particularly in demand, providing developers with opportunities to cater to the growing desire for more accessible housing options.
In the workplace market, both Dubai and Abu Dhabi skilled strong calls for office space. Landlords remained in a good role as rents persisted to rise due to the constrained availability of exceptional space and growing inquiries from occupiers. While there was a growing preference for high-quality office areas, Grade A offices have been constrained in delivery. Additionally, converting work styles and the upward thrust of far-flung working possibilities caused expanded demand for flexible workplace spaces.
Industrial and Logistics Sector Growth
The speakers highlighted that the industrial sector in the UAE is experiencing a strong demand for high-quality logistics and warehousing solutions. The country holds a leadership position in the GCC and ranks 7th globally on the Logistics Performance Index. Government-led initiatives such as Operation 300 billion, UAE Industrial Strategy 2030, and Made in the UAE are expanding opportunities for manufacturing and logistics. These initiatives, coupled with the growth of third-party logistics (3PLs) and e-commerce, are expected to drive further growth in the sector.
