Where are UAE property prices headed in 2024?

Property prices in the UAE are expected to continue rising amid higher demand from buyers but there could be a turn in the second half of 2024 that could affect the luxury market, according to developers and analysts.

In Dubai, the commercial and tourism hub of the Middle East, average residential prices are projected to increase by 5 per cent to 7 per cent, while in Abu Dhabi, prices will rise by 3 per cent to 5 per cent, Haider Tuaima, director and head of real estate research at ValuStrat told media.

“In the next three to four months, the market will continue to be strong in terms of transactional activity, in terms of price appreciation and rental increases,” Mr Tuaima said.

However, in the middle of next year, probably in summer, “we could see an inflection point where we could see a turn in the curve and if it happens then it will hit the high-end luxury market first”, he said.

“Will it stabilise that market or will it start [a] price correction is something we don’t know. But it is very possible, highly likely, that we will see some change in the direction of the high-end luxury market.”

The UAE’s property market remained strong this year with transaction volumes rising both in Dubai and Abu Dhabi amid government initiatives such as residency permits for retired and remote workers and overall growth in the economy.

Dubai recorded 116,116 new property transactions worth about Dh429.6 billion ($117 billion) in the first nine months of 2023, according to the latest data from the Dubai Land Department.

Total transactions in the emirate increased by 33.8 per cent on an annual basis, while values rose more than 36.7 per cent during the period.

Property deals also grew in Abu Dhabi amid higher demand from domestic and GCC investors.

Abu Dhabi recorded 10,557 real estate transactions worth Dh46.33 billion in the first half of 2023, the emirate’s media office reported in July, citing data from the Department of Municipalities and Transport.

The value of the deals more than doubled during the six months while the volume of transactions, including property sales and mortgages, rose by 41 per cent on an annual basis.

In Dubai, residential prices rose by 19.6 per cent annually in the third quarter, with average apartment and villa prices increasing by 19.7 per cent and 18.9 per cent, respectively, according to CBRE.