Despite some worries about the global economy (trade tensions, lower oil prices), the real estate markets in Dubai and Abu Dhabi had a strong start to 2025, according to CBRE. The UAE’s diverse economy and strong trade ties are helping it weather these global issues. The country’s foreign trade jumped significantly, showing its efforts to find new trading partners are working.
Key Moves:
Dubai made it easier for companies in its free zones to also operate in the mainland, which is expected to boost the economy. However, this doesn’t include the Dubai International Financial Centre (DIFC).
Dubai’s Housing Market:
- Both rent and property values went up compared to last year.
- Many new homes are being built, especially near the water and in more affordable areas (over 25,000 new units launched).
- Because new homes are taking longer to finish, rents have increased (around 11% for apartments and 9% for villas).
- Property sales prices are up significantly (over 16%).
- While rent increases have slowed down a bit, they are still a concern for people facing higher living costs.
- The number of property sales jumped a lot (23% compared to last year), with more people buying off-plan (not yet built) properties.
- The total value of properties sold also increased significantly.
- Even though fewer off-plan properties were sold compared to the last few months, sales of ready properties stayed high.
- A weaker US dollar might attract more foreign buyers to Dubai’s housing market.
Abu Dhabi’s Housing Market:
- Property prices continued to go up.
- Fewer off-plan properties were sold, but more ready properties were bought, showing demand from people who want to live there or rent them out.
Expert Opinion (Matthew Green, CBRE):
- There aren’t enough properties available in the UAE across all types of real estate, which is why rents are still rising and properties are filling up.
- This lack of supply is also pushing property prices higher in both Dubai and Abu Dhabi.
- Despite some global economic worries, the future for the UAE looks good because its economy is becoming less reliant on oil and it trades with many different countries.
Office Space in the UAE:
- Dubai: There’s a high demand for good office space in good locations, but not enough of it. This is making rents and occupancy rates go up. Not much new office space is expected until 2027. Most of the new space planned for 2025 is already rented out. Most offices are full (94%), and rents are much higher than last year (over 20%).
- Abu Dhabi: The office market is doing well because the non-oil part of the economy is strong, and government investments are creating demand for office space. Most offices are full (96%), and rents are also higher than last year. It’s harder to find new office space.
UAE Hospitality (Hotels):
- More tourists are visiting the UAE.
- Dubai saw more visitors, but hotel occupancy was slightly down.
- Abu Dhabi also had more visitors and better hotel performance, with revenue per available room (RevPAR) increasing.
UAE Retail:
- Not many new shops are expected to open in Dubai or Abu Dhabi in the next couple of years.
UAE Industrial (Warehouses):
- The market for warehouses is growing because the economy is doing well.
- Warehouse rents have gone up a lot in both Dubai and Abu Dhabi, especially in Abu Dhabi’s Khalifa Economic Zones (KEZAD).