Khaleej Times, Wed, Mar 20, 2024 | Ramadan 10, 1445
Dubai realty on track to deliver 34,000 units in 2024
Emirates:
The UAE’s real estate sector is expected to continue its upward trajectory in
2024 despite a softening global outlook, with Dubai and Abu Dhabi on track to
deliver approximately 34,000 units and 8,000 units respectively, according to
experts at a panel discussion.
Robust economic fundamentals, government initiatives, and increased investor
confidence are driving new opportunities for sustained growth across asset
classes in the UAE’s rapidly evolving market, especially in the short and medium
term, panellists said at JLL’s “Navigating the growth spectrum: Exploring
Strategies for sustained success” event.
The real estate sector, in particular, is expected to maintain the upward
momentum, building on the strong growth and high levels of buyer demand
experienced in 2023, they said.
James Allan, CEO, Middle East and Africa (MEA), JLL, said a robust and resilient
real estate industry has established itself as a firm pillar of the UAE’s
diversification agenda and is expected to deliver a strong performance in 2024
even under inflationary pressures.
“The positive outlook for growth and upward trends in the investment climate
offer stability in a time of global uncertainty, reinforcing the UAE’s position
as an attractive choice for regional and international real estate investors.”
At the panel discussion, the stalwarts estimated that despite the annual
increases in both value and volume of transactions in the residential segment,
the pace of increase is likely to slow down in the year ahead.
Even as luxury remains a niche segment, branded residences, wellness, and
lifestyle-oriented real estate projects enjoy solid growth alongside co-living
spaces 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 leading real estate technology and market
intelligence provider, Dubai’s buoyant residential market is poised to witness
the handing over of more than 40,000 units in 2024 on the back of close to
100,000 new units launched in 2023. The housing sector, which posted the largest
annual price increase of 16.4 per cent in over a decade last year, will continue
to add to the robust pipeline of supply that will be delivered in the years
ahead, Property Monitor said in a report recently.
Speakers said at JLL panel event that with the rise of private and sovereign
wealth as well as increased infrastructural spending, there is brighter
prospects for the real estate sector in the wider GCC, a region less sensitive
to the global challenges of inflation and hikes in interest rates.
“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.
The UAE’s position as a financial and business hub has strengthened demand
across the major asset classes and global institutions are actively eyeing
investment opportunities in the country, they noted. “Buoyed by its high
desirability index, residential, hospitality, and office remain the
top-performing segments in the UAE. Commercial real estate represents a
competitive landscape with supply-demand gaps for high-quality spaces. Core
asset classes continue to generate interest in the UAE’s capital market and the
aggressive pricing strategy pursued by asset managers witnessing prime office
and hospitality yields about to break the 7.0 per cent threshold.”
According to them, an increased focus on sustainability and tech innovations are
further reshaping the real estate landscape where green building practices and
energy-efficient designs are gaining prominence and becoming a must-have.
Financial institutions too have expanded their competitive lending offerings for
green projects.
Dubai has experienced an uptick in luxury off-plan property launches. The
residential segment most in demand is below Dh3 million, expanding the scope of
opportunities for developers to meet the growing desire for affordable housing
options.
In the office market, strong demand for office space was observed in both
cities. The market remained firmly in favour of landlords, as rents continued to
increase due to the limited availability of quality space and rising inquiries
from occupiers. Despite a growing preference for quality over quantity, Grade A
offices were limited in supply while changing work patterns and remote working
opportunities led to a surge in demand for flex offices.
Speakers noted that strong demand for high-quality logistics and warehousing
solutions is stimulating the industrial sector where the UAE holds a leadership
position in GCC and is ranked 7th globally on the Logistics Performance Index.
Government-led initiatives such as Operation 300 billion, UAE Industrial
Strategy 2030, and Made in the UAE, for instance, are expanding the scope for
manufacturing and logistics with 3PLs and e-commerce estimated to drive growth.