How much have house prices and rents increased in Abu Dhabi and Dubai?

Activity levels in the UAE real estate sector continued to perform strongly in the third quarter despite rising global headwinds.

In the residential sector, average property prices in Abu Dhabi increased by 3.2% in the year to September 2022, with the average price of apartments rising by 3.3% and the average price of villas, according to commercial real estate services and investment firm CBRE. up 2.7%.

As of September 2022, rents in the capital’s residential market fell by an average of 0.5%, with apartment rents up 0.3% and villa rents up 1.2%.

In the third quarter of 2022, transaction data in Abu Dhabi increased by 37.5% year-on-year. In its quarterly property market review, CBRE said 3,164 new units were completed and delivered in Abu Dhabi in the year to September 2022, with a further 5,516 new units expected to be delivered during the year.

In Dubai, the average property price increased by 8.9% in the year to September 2022, with the average price of apartments increasing by 8.0% and the average price of villas by 14.3%.

In its market review, CBRE said average rent growth hit a record high over the same period, with average rents in Dubai increasing by 26.6%, while average rents for apartments and villas increased by 26.7% and 25.5% respectively.

Taimur Khan, head of research for the Middle East and North Africa region at CBRE Dubai, noted that the UAE’s real estate market is growing and will remain resilient.

“There is no doubt that we will see weaker global macroeconomic conditions impact economic activity in the UAE. However, the UAE’s fiscal position, relaxation of business and residency regulations throughout the year, and safe-haven status are expected to dampen the magnitude of the impact. Therefore, we Real estate activity and performance in the UAE is expected to remain fairly resilient going forward, given the fundamentals underpinning the market,” he said.

Dubai has completed and delivered 20,847 new units by 2022.

An additional 33,756 units are expected to be completed by the end of this year, but we expect some of these completions may be delayed until 2023. Total transactions in the Dubai residential market reached 8,020 units in September 2022, an increase of 47% compared to the same period last year. In the year to September 2022, total transaction volume reached its highest level since 2009, with a total of 63,143 transactions, an increase of 56.2%. Looking ahead, we expect average house price growth to continue to moderate. However, we expect price performance in prime neighborhoods to continue to outperform the broader market.

(Writing by Seban Scaria; Editing by Daniel Luiz)

(seban.scaria@lseg.com)