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Arabian Business
23-05-2025
- Business
- Arabian Business
Abu Dhabi property prices rise 7.2% annually in Q1 2025 despite sales volume drop: Report
Abu Dhabi's property market delivered its strongest capital gains in three years during the first quarter of 2025, even as sales volumes declined due to limited supply, according to the latest ValuStrat report. The ValuStrat Price Index (VPI) for residential properties rose 2.1 per cent quarterly and 7.2 per cent annually to reach 125.6 points, based on a Q1 2021 baseline of 100. Villa prices outperformed apartments, climbing 2.7 per cent quarterly and 9.7 per cent annually to 134.7 points, while apartment prices increased 1.5 per cent quarterly and 4.5 per cent annually to 116.9 points. 'Abu Dhabi records strongest capital gains in three years, whilst sales volumes slow due to constrained supply,' said Haider Tuaima, Managing Director at ValuStrat. The weighted average home value in Abu Dhabi stood at AED 10,226 per square metre (AED 950 per square foot), with apartments averaging AED 10,979 per square metre and villas at AED 8,407 per square metre. Saadiyat Island led annual capital gains for villas, recording a 21.2 per cent increase, followed by Al Raha at 8.2 per cent and Mohammed Bin Zayed City at 4.7 per cent. Among apartments, Al Reef saw the highest annual gains at 7.5 per cent, followed by Saadiyat Island at 6.2 per cent and Al Muneera Island at 5.7 per cent. Rental values rise sharply Rental values also increased, with the residential rental VPI rising 2.2 per cent quarterly and 9 per cent annually to 121 points. Apartment rents outpaced villas, growing 3.4 per cent quarterly and 11.6 per cent annually, while villa rents rose 6.3 per cent annually but remained flat quarterly. Average annual apartment asking rents stood at AED 114,000, with studios at AED 63,000, one-bedroom units at AED 89,000, two-bedroom apartments at AED 125,000, and three-bedroom units at AED 180,000. Villa rents averaged AED 245,000 annually, with three-bedroom properties at AED 180,000, four-bedroom homes at AED 244,000, and five-bedroom villas at AED 312,000. Gross yields averaged 7.8 per cent, with apartments delivering 8.3 per cent and villas 6.7 per cent. The estimated average residential occupancy rate reached 88.1 per cent. Abu Dhabi's residential market update Abu Dhabi completed just 90 apartments and 189 villas during the first quarter, representing 2 per cent of the expected 2025 residential pipeline of 13,941 units. . Bloom Holding launched Carmona in Zayed City, while 18 and 19 in Masdar City with 483 units. Taraf, collaborating with Marriott International, launched W Residences Abu Dhabi on Al Maryah Island, a 37-storey development. Abu Dhabi off-plan sales plummet 79% annually Sales activity presented contrasting trends. Total sales volume reached 1,301 transactions, down 42.9 per cent quarterly. The average sales ticket size increased 8.8 per cent quarterly to AED 2.88 million. Off-plan sales, representing 28.5 per cent of overall sales, fell 57.7 per cent quarterly and 79.2 per cent annually to 371 transactions, attributed to fewer project launches. However, the average off-plan price stood at AED 1,585 per square foot, decreasing 8.8 per cent quarterly but growing 8.7 per cent annually. The average off-plan ticket size reached AED 3.56 million, up 19.2 per cent annually. Ready property transactions totalled 930 units, down 33.6 per cent quarterly but up 13.6 per cent annually. Average ready home prices reached AED 1,146 per square foot, increasing 5.8 per cent annually and 7.9 per cent quarterly. The average ready home ticket size hit AED 2.6 million, up 28.9 per cent quarterly and 23.8 per cent annually. Mortgage transactions dominated the market with 2,846 deals worth AED 9 billion, compared to 1,375 cash transactions valued at AED 5 billion. Abu Dhabi office rents jump 31.8% annually 'The office market showed strong performance, with rising prices and rents amid high occupancy levels, particularly in central business districts. Retail remained resilient, supported by robust foot traffic and tenant sales. Meanwhile, the hospitality sector saw exceptional results, with occupancy and revenue metrics showing significant YoY growth, backed by strong tourism activity,' Tuaima added. The office market showed strong performance, with asking rents growing 8 per cent quarterly and 31.8 per cent annually to AED 811 per square metre annually. Median asking prices increased 6 per cent to AED 2.25 million. Average occupancy in central business districts reached 90.5 per cent. Office stock totalled 3.9 million square metres of gross leasable area. Aldar Properties expects to complete the HB Office Tower on Yas Island by year-end, while Masdar City Square will add 50,000 square metres during the second quarter. Shopping centre stock stood at 1.95 million square metres of gross leasable area. The occupancy rate for Aldar's retail assets reached 90 per cent during 2024. Yas Mall recorded 97 per cent occupancy with a 10 per cent increase in tenant sales and 18 per cent rise in footfall. My City Centre Masdar achieved 81 per cent occupancy. The hospitality sector delivered exceptional results. Hotel occupancy reached 86.9 per cent during the first two months of 2025, up 1.2 per cent from the same period in 2024. The Average Room Rate stood at AED 683, up 37.1 per cent annually, while Revenue Per Available Room reached AED 594, increasing 38.7 per cent annually. Abu Dhabi welcomed 5.2 million guests in 2024, a 28.7 per cent increase. The emirate had 34,372 hotel keys as of February 2025, with supply expected to surpass 50,000 by 2030. Mondrian Hotels will debut its first UAE property in Downtown Abu Dhabi, while Hilton and Aldar will open Abu Dhabi's first Waldorf Astoria at the former Anantara Eastern Mangroves site. Industrial property asking prices rose 14.8 per cent annually and 1.5 per cent quarterly. Warehouse prices ranged from AED 152 to AED 430 per square foot, with modern cold storage facilities commanding premium rates. Annual rental rates increased 12.3 per cent at the lower end and 17.9 per cent at the higher end, ranging from AED 25 to AED 54 per square foot. AD Ports Group inaugurated the Al Faya Dry Port between Abu Dhabi and Dubai. Bisconni Middle East Manufacturing signed a 50-year lease with KEZAD Group for a 37,000 square metre facility, investing AED 110 million. AquaChemie opened a 25,804 square metre manufacturing facility in KEZAD. The UAE economy is projected to grow 5 per cent to 6 per cent in 2025, supported by technology, renewable energy, trade, financial services, and infrastructure sectors. Abu Dhabi's economy grew 3.8 per cent in 2024, driven by the non-oil sector, with manufacturing contributing 9.5 per cent to GDP and construction recording 11.3 per cent. The Abu Dhabi Consumer Price Index for February 2025 stood at 106.4 points, stable annually. Housing and utilities increased 2 per cent annually to 101.9 points, the highest in two years. The US Federal Reserve maintained interest rates at 4.25 per cent to 4.5 per cent as of March 2025. Abu Dhabi's Murban crude oil price stood at AED 277.1 ($75.5) per barrel as of March 2025. The UAE's foreign trade reached AED 3 trillion for the first time by the end of 2024, growing 14.6 per cent.
The National
03-05-2025
- Business
- The National
Housing demand soars in Dubai amid influx of 1,000 residents a day in first quarter of 2025
Housing demand in Dubai has reached unprecedented levels as a growing population continues to drive absorption of supply in the residential market, according to real estate consultancy ValuStrat. By the end of March, Dubai's population had risen to 3.92 million, with 89,695 new residents added in just the first three months of the year, an average of approximately 1,000 people per day. The net population increase for 2024 was 170,478 people, averaging less than 500 per day, ValuStrat said in a new report. 'Securing an affordable home to buy or rent is becoming more difficult in an increasingly unaffordable market,' said Haider Tuaima, managing director and head of real estate research at ValuStrat. 'There has been consistent annual growth in capital values across all segments, according to the ValuStrat Price Index, which tracks the residential market. Apartment prices have risen by 21.4 per cent, while villa prices have increased by 30.3 per cent. Rents have also surged, with villa rents up by 5.1 per cent and apartment rents rising by 10 per cent.' The number of people seeking to buy or rent outstrips the volume of available properties. An earlier report issued by ValuStrat said that 27,000 new homes were completed in 2024, which the consultancy said was the lowest figure for six years. Meanwhile, the emirate's population continued to grow, meaning demand was significantly outstripping supply. Dubai's property market has been benefiting from government initiatives, such as residency permits for retired and remote workers, expansion of the 10-year golden visa programme and overall growth in the UAE's economy on diversification efforts. Around 61,580 new homes are estimated to be delivered in Dubai this year, 70 per cent being apartments, and 30 per cent villas/town houses. Of these, 19 per cent, nearly 12,000 apartments and villas, were completed in the first quarter alone, ValuStrat found. 'This is not unexpected, considering that just over half of last year's projected deliveries were ultimately handed over,' Mr Tuaima said. ValuStrat estimated that 141,404 apartments and 29,649 villas and town houses are actively under construction, with handovers promised by 2029. Of these projects, 12 per cent is located in Jumeirah Village Circle, with another 7 per cent located in Business Bay followed by Jumeirah Lakes Towers with 5 per cent, the consultancy found. Off-plan Oqood (contract) registrations declined by 8 per cent in the first quarter compared to the previous three months, but were 37.5 per cent higher annually, representing investments totalling Dh77.3 billion. The first quarter recorded 12,396 secondary ready home transactions, up 5.8 per cent year-on-year but down 7 per cent quarter-on-quarter, equivalent to investments worth Dh33billion, the data showed. The Dubai real estate market registered 9,388 mortgage transactions across all asset classes in the first three months of 2025, compared to 14,386 cash transactions of ready properties. The total sales value attributed to mortgage transactions stood at Dh21 billion, with cash transactions totalling Dh33 billion. 'The only downside this quarter was the decline in residential sales, both off-plan and ready properties, as well as a decrease in mortgage applications, though this is only when compared to the previous quarter. This trend is neither unprecedented nor unexpected and may be attributed to a mismatch between supply and demand, potentially leading to a market correction at some point,' according to Mr Tuaima. On average, most apartment communities remain 8.1 per cent below their capital values from a decade ago. Notable exceptions include Palm Jumeirah, The Greens and Jumeirah Beach Residence. In contrast, villa valuations in Dubai are, on average, 59.9 per cent above their previous market highs from 10 years ago. During the first quarter, villa capital gains recorded a 30.3 per cent annual and 6.2 per cent quarterly increase. The most significant yearly growth was observed in Jumeirah Islands, Palm Jumeirah, Emirates Hills and The Meadows, while Mudon recorded the lowest gains, ValuStrat found. Apartment values posted a decelerated annual increase of 21.4 per cent and quarterly growth of 3.8 per cent. The highest capital gains over the year were seen in The Greens, Dubailand Residence Complex, Palm Jumeirah, Town Square and The Views. Villa asking rents remained stable quarterly but were up 5.1 per cent annually. Apartment asking rents increased by 1.6 per cent quarterly and 10 per cent yearly, the consultancy said.
The National
03-05-2025
- Business
- The National
Housing demand soars in Dubai amid influx of 1,000 new residents per day in Q1
Housing demand in Dubai has reached unprecedented levels as a growing population continues to drive absorption of supply in the residential market, according to real estate consultancy ValuStrat. By the end of March, Dubai's population had risen to 3.92 million, with 89,695 new residents added in just the first three months of the year, an average of approximately 1,000 people per day. The net population increase for 2024 was 170,478 people, averaging less than 500 per day, ValuStrat said in a new report. 'Securing an affordable home to buy or rent is becoming more difficult in an increasingly unaffordable market,' said Haider Tuaima, managing director and head of real estate research at ValuStrat. 'There has been consistent annual growth in capital values across all segments, according to the ValuStrat Price Index, which tracks the residential market. Apartment prices have risen by 21.4 per cent, while villa prices have increased by 30.3 per cent. Rents have also surged, with villa rents up by 5.1 per cent and apartment rents rising by 10 per cent.' The number of people seeking to buy or rent outstrips the volume of available properties. An earlier report issued by ValuStrat said that 27,000 new homes were completed in 2024, which the consultancy said was the lowest figure for six years. Meanwhile, the emirate's population continued to grow, meaning demand was significantly outstripping supply. Dubai's property market has been benefiting from government initiatives, such as residency permits for retired and remote workers, expansion of the 10-year golden visa programme and overall growth in the UAE's economy on diversification efforts. Around 61,580 new homes are estimated to be delivered in Dubai this year, 70 per cent being apartments, and 30 per cent villas/town houses. Of these, 19 per cent, nearly 12,000 apartments and villas, were completed in the first quarter alone, ValuStrat found. 'This is not unexpected, considering that just over half of last year's projected deliveries were ultimately handed over,' Mr Tuaima said. ValuStrat estimated that 141,404 apartments and 29,649 villas and town houses are actively under construction, with handovers promised by 2029. Of these projects, 12 per cent is located in Jumeirah Village Circle, with another 7 per cent located in Business Bay followed by Jumeirah Lakes Towers with 5 per cent, the consultancy found. Off-plan Oqood (contract) registrations declined by 8 per cent in the first quarter compared to the previous three months, but were 37.5 per cent higher annually, representing investments totalling Dh77.3 billion. The first quarter recorded 12,396 secondary ready home transactions, up 5.8 per cent year-on-year but down 7 per cent quarter-on-quarter, equivalent to investments worth Dh33billion, the data showed. The Dubai real estate market registered 9,388 mortgage transactions across all asset classes in the first three months of 2025, compared to 14,386 cash transactions of ready properties. The total sales value attributed to mortgage transactions stood at Dh21 billion, with cash transactions totalling Dh33 billion. 'The only downside this quarter was the decline in residential sales, both off-plan and ready properties, as well as a decrease in mortgage applications, though this is only when compared to the previous quarter. This trend is neither unprecedented nor unexpected and may be attributed to a mismatch between supply and demand, potentially leading to a market correction at some point,' according to Mr Tuaima. On average, most apartment communities remain 8.1 per cent below their capital values from a decade ago. Notable exceptions include Palm Jumeirah, The Greens and Jumeirah Beach Residence. In contrast, villa valuations in Dubai are, on average, 59.9 per cent above their previous market highs from 10 years ago. During the first quarter, villa capital gains recorded a 30.3 per cent annual and 6.2 per cent quarterly increase. The most significant yearly growth was observed in Jumeirah Islands, Palm Jumeirah, Emirates Hills and The Meadows, while Mudon recorded the lowest gains, ValuStrat found. Apartment values posted a decelerated annual increase of 21.4 per cent and quarterly growth of 3.8 per cent. The highest capital gains over the year were seen in The Greens, Dubailand Residence Complex, Palm Jumeirah, Town Square and The Views. Villa asking rents remained stable quarterly but were up 5.1 per cent annually. Apartment asking rents increased by 1.6 per cent quarterly and 10 per cent yearly, the consultancy said.
Arabian Business
02-05-2025
- Business
- Arabian Business
Soaring population increases Dubai real estate demand
Dubai's rising population is sending up demand for real estate in the city, according to ValuStrat analysis. Housing demand reached unprecedented levels, said Haider Tuaima, Managing Director and Head of Real Estate Research at ValuStrat. By the end of March 2025, Dubai's population had risen to 3.92m, with 89,695 new residents added in just the first three months of the year, an average of approximately 1,000 people per day. Dubai real estate demand For perspective, the entire net population increase for 2024 was 170,478 people, averaging less than 500 per day. The estimated number of new homes expected to be delivered this year stands at 61,580 units. Of these, 19 per cent, nearly 12,000 apartments and villas, were completed in the first quarter alone. This is not unexpected, said ValuStrat, considering that just over half of last year's projected deliveries were ultimately handed over. Securing an affordable home to buy or rent is becoming more difficult. According to the ValuStrat Price Index (VPI), which tracks the residential market, there has been consistent annual growth in capital values across all segments. Apartment prices have risen by 21.4 per cent, while villa prices have increased by 30.3 per cent. Rental rates have also surged, with villa rents up by 5.1 per cent and apartment rents rising by 10 per cent. Demand for office space in Dubai remained strong, driven by sustained economic growth and business expansion. The VPI tracking the office sector showed an impressive 29.1 per cent annual increase in capital values and a 20.2 per cent increase in asking rents. The hospitality and industrial sectors also sustained positive growth. Haider Tuaima said the only downside this quarter was the decline in residential sales, both off-plan and ready properties, as well as a decrease in mortgage applications, though this is only when compared to the previous quarter.
Zawya
01-05-2025
- Business
- Zawya
ValuStrat report: Growing population bolsters demand in an increasingly unaffordable residential market
The latest Dubai 1st quarter real estate review report from ValuStrat, a globally recognised consultancy specialising in multi-sector advisory services, has revealed insightful dynamics in Dubai's real estate market. The report comprehensively analyses the residential, commercial, and hospitality sectors and underscores a market showing robust growth and market activity. Haider Tuaima, Managing Director and Head of Real Estate Research, shares his synopsis of Dubai's real estate market. According to him, housing demand has reached unprecedented levels. By the end of March 2025, Dubai's population had risen to 3.92 million, with 89,695 new residents added in just the first three months of the year, an average of approximately 1,000 people per day. For perspective, the entire net population increase for 2024 was 170,478 people, averaging less than 500 per day. The estimated number of new homes expected to be delivered this year stands at 61,580 units. Of these, 19%, nearly 12,000 apartments and villas, were completed in the first quarter alone. This is not unexpected, considering that just over half of last year's projected deliveries were ultimately handed over. Securing an affordable home to buy or rent is becoming more difficult. According to the ValuStrat Price Index (VPI), which tracks the residential market, there has been consistent annual growth in capital values across all segments. Apartment prices have risen by 21.4%, while villa prices have increased by 30.3%. Rental rates have also surged, with villa rents up by 5.1% and apartment rents rising by 10%. Demand for office space in Dubai remained strong, driven by sustained economic growth and business expansion. The VPI tracking the office sector showed an impressive 29.1% annual increase in capital values and a 20.2% increase in asking rents. The hospitality and industrial sectors also sustained positive growth. He concludes that the only downside this quarter was the decline in residential sales, both off-plan and ready properties, as well as a decrease in mortgage applications, though this is only when compared to the previous quarter. This trend is neither unprecedented nor unexpected and may be attributed to a mismatch between supply and demand, potentially leading to a market correction at some point. To learn more about ValuStrat's real estate market capabilities and our research outputs, please visit ValuStrat's Insights Webpage. About ValuStrat: ValuStrat is an international consulting group providing Advisory, Valuations, Research, Transaction Advisory, Due Diligence and Industrial Consulting services, working across various industry sectors. With 45+ years of experience, a network of 14 offices in 5 countries and a client base of 1,000 corporations across the Middle East, UK, Europe and Africa, ValuStrat assists diverse clients, from governments, multinationals, large local corporations and financial institutions to startups, SMEs and family businesses. For Valuation services, it is the preferred service provider to over 120 financial institutions across the EMEA region.
