The UAE´s property market continues to grow strongly, supported by robust demand, and healthy economic growth.
It also seems that the relaxation of foreign homeownership rules has pushed the demand higher.
“Looking at the performance, the residential sector continued to demonstrate strong growth in Q1 2024. In Dubai, both sale prices and rentals registered around 21% annual increases, respectively. In Abu Dhabi, sales prices increased by an average of 7%, while rental rates rose by an average of 4% during the same period.”
JLL MENA Q1 2024 UAE Real Estate Market Overview report
Dubai’s all-residential property price index (RPPI) rose strongly by 20.71% y-o-y (16.81% inflation-adjusted) in Q1 2024, following annual increases of 20.14% in 2023, 9.53% in 2022 and 9.25% in 2021, and y-o-y declines of 7.12% in 2020, 6% in 2019 and 8.56% in 2018. In fact, it was its best showing since Q3 2024.
Property prices
On a quarterly basis, Dubai residential property prices were up by 6.12% (5.57% inflation-adjusted) in Q1 2024.
Apartment prices in Dubai surged by 20.43% (16.54% inflation-adjusted) during the year to Q1 2024, a sharp acceleration from the prior year’s 12.4% growth. Quarter-on-quarter, apartment prices were up by 6.2% (5.66% inflation-adjusted) in Q1 2024.
Villa prices increased sharply by 22.08% (18.14% inflation-adjusted) y-o-y in Q1 2024, following a 14.82% growth in the prior year. On a quarterly basis, prices rose by 5.35% (4.8% inflation-adjusted) in Q1 2024.
The average purchase price of apartments in Dubai was AED 1.5m ($408,386) by end-2023. On the other hand, the average purchase price of villas stood at AED 3.2m ($871,222) over the same period.
Savills found that Dubai continues to have the hottest prime residential property market, with capital values increasing 17.4% for the year, with a more modest 5.6% recorded in the second half. This performance is recorded against an average price growth of 2.2% across 30 global cities covered in the Savills Prime Residential World Cities Index.
Foreign homeownership rules
Foreign ownership laws are now very liberal in the UAE, particularly in Dubai and Abu Dhabi. Overseas nationals are now allowed to buy freehold properties in designated areas in Dubai.
Gulf Cooperation Council (GCC) nationals are allowed freehold ownership anywhere in the Emirates.
Abu Dhabi allows foreigners to own property in designated investment zones on a freehold basis. This followed other market-boosting measures.
In 2012, the government compelled public sector employees living outside Abu Dhabi to relocate within the emirate’s borders. Then in November 2013, the government canceled a 5% cap on annual rent increases.
Most residential property buyers in Dubai and Abu Dhabi are UAE nationals, followed by Indians, Saudis, British and Pakistanis.
UAE is one of the richest countries in the world, with a GDP per capita (PPP) of $92,073 in 2023, based on IMF figures.
