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Eye of Riyadh
Business & Money | Friday 10 November, 2023 1:41 am |
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Asteco Q3 2023 Real Estate Report Highlights Ongoing Momentum in the UAE Market with Launch of New Projects

The Q3 2023 real estate report by Asteco, the UAE’s leading full service Real Estate company, highlights that Abu Dhabi's residential sales market is poised for an anticipated growth in the coming months, while Dubai’s real estate landscape remains marked by an ongoing momentum, defined by a continuous stream of new project launches. This growth is attributed by increasing housing demands across diverse segments of the population and supported by proactive government initiatives geared towards fostering the expansion of the real estate sector. 

 

 

 

Abu Dhabi Residential and Office Market 

 

 

 

According to the report, the Abu Dhabi real estate market saw the delivery of 1,000 residential units in Q3 2023, spread across various communities, with a notable concentration in Al Raha Beach. This period recorded the launch of key projects, such as Gardenia Bay on Yas Island, Vista 3 on Al Reem Island, Perla 3 in Yas Bay, Al Jurf Phase 2 in the Ghantoot area, Murjan Saadiyat on Saadiyat Island, Icon Tower in Yas Bay, as well as a new phase of Sadiyaat Lagoons. 

 

 

 

Several new projects, including residential, commercial, and mixed-use developments, are also in the planning / design stage with official announcements expected in the next 6 months.

 

 

 

The rental market recorded annual growth rates of approximately 3% and 4% for apartments and villas respectively. Average apartment rental rates recorded marginal growth over the quarter, but prime and high-end developments measured notable increases ranging from 4% to 6%. On an annual basis, these rates nearly reached 10% compared to the same period last year. The rates for apartments in buildings with lower quality specifications, primarily those located on Abu Dhabi Island, remained stable on a quarterly basis, with marginal year-on-year increments. The villa market continued to exhibit robust demand, particularly in new communities. 

 

 

 

Furthermore, office rental rates surged by 6% over the quarter and by 10% year-on-year driven by the limited availability of prime office space, robust demand from expanding businesses and the government’s proactive initiatives to attract foreign investment.

 

 

 

A total of 4,160 sales transactions were recorded in Q3 2023, which represents a significant uptick in transactional volumes for the Abu Dhabi real estate market, marking a 32% increase from the previous quarter and a notable 102% surge from the same period last year. 

 

 

 

Apartment sales prices remained relatively stable over Q3 2023. Villa sales prices, on the other hand, experienced a modest 1% quarter-on quarter and 3% year-on-year increase, driven primarily by the value appreciation of the Hidd Al Saadiyat development.

 

 

 

Off-plan development demand, particularly for high-quality ones, remained strong, with significant interest from foreign investors.

 

 

 

Dubai Residential and Office Market 

 

 

 

Despite ongoing global uncertainties over inflation, interest rates, climate issues, conflicts and technological advancements, the Dubai property market is poised for a robust end to 2023. 

 

 

 

In Dubai, Asteco notes that almost 6,250 residential units were delivered over Q3 2023, including 4,700 apartments and 1,850 villas. Although this signifies a moderate decline compared to previous quarters, it remains a substantial volume. It is anticipated that over 130,000 new dwellings would be delivered in the next three to four years.

 

 

 

Rising demand for office space is likely to usher in new commercial launches in the foreseeable future. The handover of Uptown Tower, a 500,000 sqft Grade A development in Jumeirah Lakes Towers (JLT), presents a significant milestone. Additionally, the impending delivery of Innovation One in Dubai International Financial Centre (DIFC) further underscores the market’s dynamism. 

 

 

 

Furthermore, the rental landscape continues to offer growth potential for specific developments and areas. The market has seen a gradual moderation in rental rate growth. Asteco’s data reveals a definite slowdown, with rental gains at 3%, 2%, and 4% for apartments, villas, and offices over the three-month period. On an annual scale, the changes stood at 18%, 19% and 29% respectively.

 

 

 

The market has witnessed a surge in the availability of new holiday homes. According to the latest data from the Dubai Department of Economy and Tourism, there has been a substantial 45% year-on-year increase in the number of registered holiday homes in Dubai, as of March 2023.

 

 

 

In the sales market, average sales price growth continued to decelerate, with quarterly increases of 1% for apartments, 2% for villas and 3% for offices. On an annual basis, these changes stood at 12%, 14% and 19% respectively.

 

 

 

Al Ain and Northern Emirates Market 

 

The Northern Emirates, like Dubai, witnessed a steady stream of new project launches, which influenced the market, with average quarterly increases in apartment and villa sales prices of 3% and 2% respectively. Apartment rental rates in the Northern Emirates continued their steady rise, albeit modestly, with a 2% increase in Q3 2023 and a 4% annual uptick.

 

 

 

Sharjah’s office rental rates recorded a marginal 1% rise over the last three months due to enhanced market sentiment and business expansion, although net effective rents may have been influenced by additional incentives. Annual changes stood at 5%. 

 

 

 

Transaction activity surged across the Northern Emirates, evident from the Sharjah Real Estate Registration Department (SRERD) reporting 59,258 real estate transactions for the first 9 months of 2023, a 15% increase compared to the same period last year. Moreover, Ajman’s Department of Land and Real Estate Regulation noted a 61.5% year-on-year growth in real estate transactions for August 2023, underlining the region’s expanding market dynamics.

 

 

 

The Al Ain real estate market continued to exhibit robust demand across all asset classes, indicating positive overall market sentiment.  After a period of stagnant rental growth, recent data highlights a notable increase in rental rates for good-quality villas, ranging from 3% to 5% on average over the quarter. In addition, rental rates for high-quality office space increased by an average of 2% in the third quarter.

 

 

 

In terms of new supply, several residential buildings were handed over in different areas of Al Ain, mainly concentrated in the Town Center areas. These developments, coupled with the evolving rental landscape and increasing demand, signify a positive trajectory for the Al Ain real estate market.

 

 

 

 

 

-Ends-

 

 

 



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