The first quarter of 2024 saw tremendous growth in the UAE’s residential sector, with rentals, transaction volumes, and prices all continuing to rise as robust demand drove overall performance.

According to CBRE Middle East, Dubai’s residential sales market will continue to expand rapidly in the upcoming months. Prices will rise in both the market sectors for apartments and villas, although not at the same rate. Regarding rentals, our prediction is that the cost of living will keep rising. Nevertheless, the rate of increase would probably slow down, according to the analysis from the real estate services and investments company.

The residential market in Dubai set yet another record in March 2024, with transaction volumes surpassing the highest monthly amount ever and a 13.2 percent year-over-year gain. Off-plan sales and secondary market sales both grew by 20.2% during this time, while secondary market sales increased by 2.2%.

Dubai recorded 35,310 total transaction volumes in the first quarter. This is the greatest amount ever reported for the first quarter of the year, up 20.5% from the same period last year. Off-plan trades increased by 23.9% during this time, while secondary market transactions increased by 15.2%.

In the first quarter of this year, there were 2,795 total transactions in Abu Dhabi, which represents a 22.6 percent rise from the same period last year. A 18.1% increase in off-plan purchases and a 34.5% increase in secondary market sales have supported this surge. The average cost of an apartment in Abu Dhabi climbed by 2.3% and that of a villa by 4.3%, respectively, in the year leading up to Q1 2024.

The UAE’s residential market had a reasonably good start to the year, and performance is still being driven by high levels of demand. For the rest of the year, price rise in Abu Dhabi and Dubai will be supported by the robust activity and high absorption levels that have decreased supply, according to Taimur Khan, CBRE head of research Mena.

Regarding the growth of rental rates, we anticipate that Abu Dhabi will continue to see increases, with premium neighborhoods expected to outperform the market. Residential rentals in Dubai will rise, but not as quickly as they have been lately, and we anticipate that the rate of change will slow down in the second half of the year, according to Khan.

In Dubai, the average cost of a villa was Dh 1,776 per square foot, while the average cost of an apartment was Dh 1,486. The average sales rate for villas is currently 22.9% more than its baseline from 2014. Following a period of stabilization in 2023, rental growth has also picked up speed in 2024.

March 2024 saw an increase in average residential rentals of 21.2% year over year, which was a rise from the 20.4% growth observed the previous month. The average rental rates for apartments and villas increased by 22.1 percent and 14.5%, respectively, throughout this time.

According to information from the Dubai Land Department, there were 159,941 rental registrations overall as of March 2024, up 5.8% over the same month the previous year. In terms of supply, 6,526 units were supplied in the first quarter of the year, with Meydan One, Jumeirah Village Circle, and Al Furjan accounting for 59.7% of this total. For the balance of the year, an additional 46,086 are anticipated to be turned over. Nonetheless, we anticipate that a small percentage of this forthcoming stock will materialize as scheduled, based on past materialization rates.

In Q1 2024, there were 46,130 residential rental contracts in Abu Dhabi’s rental market, a decrease of 10.9% from the same period the previous year. This can be attributed to a 15.5% decrease in the number of registered renewals of rental contracts and a 2.4% decrease in new rental registrations over the same time frame. The average rent for an apartment and a villa climbed by 4.5% and 1.1%, respectively, in the year leading up to Q1 2024.

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