According to JLL's UAE real estate market overview for Q1 2024, Dubai delivered approximately 10,000 residential units in the first quarter, while Abu Dhabi contributed 1,600 units. Both cities are showing strong housing supply performance, especially Dubai, which kicked off the year with considerable vigor. With an additional 25,000 apartments expected to be delivered by year-end, Dubai’s total residential inventory is projected to reach about 729,000 units. These new apartments are primarily located in sought-after areas like MBR City, Business Bay, Jumeirah Village, and Dubai Land, known for their prime locations and high-quality residential developments.

Though smaller in scale, the Abu Dhabi market shows consistent growth potential with a steady delivery rate, anticipating an addition of 6,000 residential units by year's end. Faraz Ahmed, JLL Mena’s research director, notes that residential sales transactions in Dubai and Abu Dhabi have increased by 20% and 17% year-over-year, respectively, indicating active markets and growing investor confidence.

However, faced with rising land prices and construction costs, developers have shifted their focus to secondary locations with pricing around 2 million dirhams to attract buyers eligible for the Golden Visa. Despite challenges related to location and costs, developers have successfully maintained market momentum by offering innovative payment schemes and designs that attract investors.

khaleejtimes.com

In terms of sale prices and rents, the Dubai market has shown significant year-over-year growth, especially in apartment rents, which have seen an annual increase of 22%, surpassing the 14% growth rate of villa rents. The Abu Dhabi market also displays positive growth in both sale prices and rents, with average sales prices up by 7.0% and rents by 4.0%, with apartment rent increases outpacing villas by 5.0%.

Additionally, robust tourism activity has driven growth in the hospitality sector. Dubai added 2,000 new hotel room keys in the first quarter, predominantly in five-star hotels located in Business Bay, Za’abeel, and Port Saeed, with nearly 2,000 new keys introduced, bringing the total to approximately 155,000 keys. A further 5,000 rooms, including four and five-star hotels, are expected to be added in Dubai this year. In contrast, Abu Dhabi's hotel supply remains relatively stable at 32,500 rooms, with an additional 500 rooms expected this year.

Given the prevalence of luxury hotels, hotel owners and operators are recognizing the competitive advantage of experience-driven developments. Operators are investing in revitalizing their offerings, enhancing their value propositions through collaborations with lifestyle groups, which helps introduce new concepts and brands, particularly in the lucrative dining sector. These healthy tourism figures and positive market activities suggest that Dubai and Abu Dhabi's real estate markets will continue to show strong growth momentum in 2024.