Astico: UAE real estate price growth in Q1 2022 | Al Khaleej Newspaper

The analysts' view of the real estate market in the UAE is extremely optimistic, according to a report by Astico. Rental and sale prices in Abu Dhabi and Dubai continue to rise, confirming the strength of real estate in the emirates. The growth is attributed to new government programs and broad economic development, creating a positive outlook in the market.

The Abu Dhabi market

The Abu Dhabi market recorded nearly 1,600 residential units delivered in the first quarter of 2023. The main construction areas are the International Investment Areas at Ras Al Aqsa and Rim and Saadiyat Islands. During the first quarter of 2023, several notable projects were also rolled out on Yas, Rim and Saadiyat islands. Planned under Abu Dhabi's current development plans, the remainder of this year shows no signs of slowing down as there are still many new projects in the planning and design stages awaiting release during the year.

While apartment rental prices have remained relatively stable, prime, luxury and high-end residential projects saw an increase in average rental values by 2% in the first quarter of 2023, although this increase is mainly noticeable for new tenants. The villa rental market continued its growth in the first quarter of 2023 with an annualized growth rate of 2%, with prime villas increasing by 5%.

There is strong demand for office space in Abu Dhabi, especially in the A and B grades, which is evident in prime sites. Prices for sales of completed apartments and villas remained broadly stable in the first quarter, despite an average annual increase of 2%. While sales of high quality projects - which are still under construction - have been on the rise lately, they are still priced well below similar properties in Dubai, making them a very good investment property. Sales volume continues to be strong for completed and pending projects, especially for end users.

The housing units still under construction continue to be in a strong position with several future projects with a high degree of pending launches that have been highly rated. Transaction volume increased 47% on a year-over-year basis. At the same time, statistics are recorded on sales of completed units, which rose by 50% year-on-year.

The market in Dubai

In terms of the market in Dubai, Astico's report focuses on the growing gaps between owners' and tenants' expectations. After years of low rents, many owners are looking to capitalize on the market recovery, which has led to increased rents on renewals. The real estate market in Dubai, in the first quarter of 2023, offered about 7,600 completed residential units, in line with the end of last year. The number of completed villas increased significantly, with nearly 2,150 units, almost double (about 1,000) the previous quarter.