Abu Dhabi off-plan sales surge; Dubai rental market slows down

Pace of rent hikes in Dubai moderated in September, says CBRE

Abu Dhabi’s off-plan residential market has seen a surge in demand, while Dubai’s rental market has shown signs of slowing down, according to a new report by CBRE.

Off-plan home sales in the UAE capital surged by 101.6% in the third quarter of the year, outpacing the 46% growth in secondary market sales, the real estate consultancy said.

The strong demand for off-plan units drove the total volume of residential transactions in the emirate to jump by 84.3% in the third quarter compared to a year earlier. In the year to date to Q3 2023, off-plan transactions also grew by 135.5%, while secondary market deals increased by just 22.7%.

The UAE capital has seen several residential project launches recently, with some developers reporting sold-out units in off-plan developments.

Overall, the UAE’s residential market continued to show strong demand during the third quarter of the year, but Dubai is starting to show some moderation.

Slowdown in Dubai

Average residential rents in Dubai went up by 20.6% in the year to September 2023, lower than the 21.7% increase recorded a month earlier.

“Although demand remains relatively elevated, we continue to see further moderation in the rental market. The rate of rental growth has softened throughout the year,” CBRE said.

The moderation trend witnessed in the rental market will likely continue, according to CBRE, citing that increases in several key residential communities are “tapering off”. A significant portion of listings within these neighbourhoods are also increasingly dropping asking rents.

As for off-plan units, September sales dropped by 41.5%, while secondary market sales increased by 30.5% when compared to the previous month.

Despite the monthly slowdown, the total volume of transactions in the year to date to September 2023 reached 87,163, the highest figure recorded over the period. The high volume of sales is underpinned by the 55.3% increase in off-plan deals and 19% increase in secondary market transactions.