The real estate market in the United Arab Emirates (UAE) keeps growing

Overall, the average residential pricing in Dubai jumped by 9% year-over-year in the third quarter, while the average rental rate increased by 25% year-over-year, thanks to rising demand and a rise in the number of people looking to rent and buy homes. Meanwhile, average rentals in the nation's capital rose by 2% year over year, while sale prices increased by 4%. Townhomes and villas, in particular, are in high demand in Abu Dhabi's investment zones.

“End-users using mortgage finance to purchase properties have been rushing to lock in fixed rates in an environment where both interest rates and rents are rising quickly. Indeed, REIDIN’s citywide residential rent index showed annual growth of 25% in August,” said Khawar Khan, Head of Research, Middle East, Africa, and Turkey at JLL. “Price growth is also being fueled by investor demand. This category has been returning to the off-plan market in force, while sales in the secondary market have also picked up given the upward trajectory of yields,”

Rising retail rents of 3% in Dubai and 5% in Abu Dhabi are indicative of a thriving retail industry that is reaping the benefits of rising customer confidence. Developers and landlords, according to JLL, will be increasingly interested in bringing in homegrown concepts, especially in the food and beverage sector, because of the allure of providing experiences that are both unique to the area and easily adapted to changing consumer tastes. In the next months, hotels will likely continue to do well thanks to major events like the Formula 1 Grand Prix, NBA games, and UFC 280, as well as the FIFA World Cup in Qatar, which is expected to have a trickle-down effect on this industry.

The third quarter saw a rise of 1,000 hotel rooms in Dubai, bringing the total to 146,000. Six thousand more keys are expected to be added before the year's end. While no extra hotel rooms became available in Abu Dhabi during the third quarter, another 600 keys are scheduled to open in the city's capital before the end of the year. Recent numbers show that the UAE's tourism industry has quickly recovered from the spread of the COVID-19 virus, even though the summer is the off season.

A huge increase over the 1.17 million registered during the same period previous year, the Dubai Department of Economy and Tourism estimates that the Emirate of Dubai had roughly 2.95 million overnight guests between June and August of 2022. According to DCT Abu Dhabi, the number of overnight visitors to Abu Dhabi rose by 24% in 2016 to reach 910,000. While high-end and oceanfront hotels have been doing particularly well, the recent uptick in tourism has also benefited the mid- to low-range hotel industry by drawing business from source markets that have long favoured these price points. Hotel occupancy in Dubai jumped to 70% from January to August 2022, up significantly over the same period in 2021 (58%). Revenue per available room (RevPAR) increased to US$ 127 on an ADR of US$ 181. Hotel occupancy in Abu Dhabi increased to 68% from 63% the previous year, with a corresponding increase to ADR of US$105 per night and RevPAR of US$71 per available room.

Across the Middle East and Africa (MEA) JLL is a leading player in the real estate and hospitality services markets. The firm has worked in 35 countries across the region and employs over 1450 internationally qualified professionals across its offices in Dubai, Abu Dhabi, Riyadh, Jeddah, Al Khobar, Cairo, Casablanca, Johannesburg, and Nairobi.