Asteco Reports Continued Growth and Resilience of Dubai’s Real Estate Market
Dubai’s real estate sector is showing remarkable growth and resilience post-pandemic, with more than 32,000 new residential properties, including villas and apartments, set to be handed over by the end of 2023, according to real estate consultancy Asteco’s Q1 2023 report. The report indicates that despite concerns over future housing supply, the emirate will witness the completion of 27,400 apartments and 4,650 villas by year-end.
Investors and end-users have shown great interest in new project launches, keeping the momentum of the real estate market strong. Dubai recorded the delivery of almost 7,600 units in Q1 2023, with villa supply rising significantly with over 2,150 units handed over, which is more than double from the previous quarter.
Villas remained the primary focus, offering higher rental and occupancy rates. The average rental rates for apartments and villas continued to record strong growth in Q1 2023, particularly in higher-quality developments, with quarterly increases of 4% and 7%, respectively. The annual price increase for apartments and villas also grew by 17% YoY, with apartments and villas up 3% and 5%, respectively.
The office rental rates grew by an average of 6% over the last three months, with annual rental increases at 21%. Asteco predicts that the momentum of Dubai’s real estate market will continue throughout 2023, albeit at a more sustainable rate than in 2022.
In Abu Dhabi, around 1,600 residential units were supplied in Q1 2023, mainly across Al Raha Beach, Al Reem Island, and Saadiyat Island. Asteco predicts that with several new projects currently in the planning and design stages, Abu Dhabi’s development pipeline throughout the rest of 2023 shows no signs of slowing down. The villa rental market continued its upward trajectory in Q1 2023, with an average quarterly increase of 2%. Lease rates in prime villa communities rose up to 5%.
While sales prices for completed residential apartment and villa developments were mostly flat over Q1, the average increase over the past 12 months was 2.0%. Sales rates for the off-plan prime and high-quality projects segment surged recently, and they remain at a steep discount to comparable properties in Dubai but represent “exceptionally good value.” Demand for office space in Abu Dhabi, particularly for Grade A/B+, remained strong, predominantly in prime locations, according to the report.
Keywords: Dubai real estate, Asteco report, residential properties, villa supply, rental rates, occupancy rates, office rental rates, post-pandemic resiliency, Abu Dhabi development pipeline, prime villa communities, high-quality developments, off-plan projects, Grade A/B+ office space.
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