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A glimpse into the future: Dubai and Abu Dhabi’s residential market in 2024

According to a recent report by JLL, a total of 34,000 units are set to be delivered in Dubai by 2024, while Abu Dhabi is expected to receive around 8,000 units

Dubai & Abu Dhabi residential market 2024

Nowadays, every news article you might come across would start with something like ‘2023, turned out to be an impressive year for the real estate sector of UAE’ or ‘Developers in Dubai responded to investor demand by launching new projects’. But let me tell you, these aren’t just empty claims – we’ve got solid facts to back them up!

According to the ‘A Year in Review 2023’ report released by JLL, Dubai’s residential market experienced a consistent influx of new supply with over 36,000 units being delivered in 2023, with apartments comprising the majority, thereby raising the total stock to over 719,000 units. Similarly, in Abu Dhabi, over 5,000 units were completed in 2023, resulting in a total completed stock of over 284,000 units.

The residential market in both cities benefited from strong demand. In 2023, Dubai witnessed substantial growth in total transactions, with a 51% Y-o-Y increase in value and a 43% Y-o-Y increase in volume for the period of January to November 2023, as per data from Dubai Pulse. On the same basis, in Abu Dhabi, successful launches in the off-plan segment contributed to a significant rise in total transaction values, which surged by 102% annually, and a 77% Y-o-Y increase in volume compared to the same period last year.

So, will the positive momentum continue into 2024 as well? Let’s find out.

A robust supply chain in Dubai & Abu Dhabi

In 2024, approximately 34,000 units are scheduled to be delivered in Dubai, while around 8,000 units are anticipated in Abu Dhabi, stated the JLL report. Speaking exclusively with CW Property Middle East, Faraz Ahmed, Director of Research at JLL MENA further broke down the numbers and stated, “Out of the total of 34,000 units, the majority is anticipated to comprise apartments, accounting for around 29,000 units, followed by villas and townhouses with a combined total of 5,000 units. On the other hand, a significant portion of the upcoming supply in Abu Dhabi is projected to consist of apartments, comprising approximately 6,400 apartment units, alongside 1,400 villas.”

Faraz Ahmed, Director of Research at JLL MENA

Which areas are expected to rule the roost in 2024 in Dubai & Abu Dhabi?

According to Ahmed, we can expect many new residential projects to be completed in Dubai’s most sought-after areas, including MBR City, Jumeirah Village Circle, Arjan, and Business Bay. These locations alone will have over 13,000 apartment units ready for occupancy. In Abu Dhabi, the focus will be on exciting new islands like Saadiyat Island, Yas Island, Reem Island, and Al Raha Beach. Together, these areas will offer more than 5,600 units, with the majority being apartments, totalling 4,500 units.

Innovation – the key to success

The residential market in Dubai and Abu Dhabi is poised for a new phase of innovation and sophistication as developers introduce off-plan projects to cater to the rising demand for futuristic living experiences. While transaction volumes are expected to maintain stable growth, the market is expected to witness a controlled moderation in growth in sales prices, promoting a sustainable market environment.

“Developers are proactively focusing on waterfront and luxury communities to target the high-end segment while emerging areas in the secondary segment are set to offer mid-to upper-scale residential options with a strong emphasis on innovation, sustainability, and community-centric living. This diversified approach aims to maintain a vibrant market accessible to a wide range of buyers,” elaborates Ahmed.

What does the market look like going forward?

While the residential market in the UAE is expected to maintain its upward momentum all the way through 2024, it may face challenges stemming from rising land prices, as evidenced by a substantial 17% Y-o-Y increase in average land prices in Dubai in December 2023, according to REIDIN data.

“Developers are expected to focus on opportunities in secondary and tertiary locations to control development costs effectively. Additionally, effective cost management strategies will be crucial for addressing uncertainties surrounding high construction costs. Lastly, high interest rates will persist as a challenge for buyers seeking mortgage financing,” concludes Ahmed.