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The UAE Central Bank (CBUAE) has reported that despite the prevailing global uncertainty and stringent monetary conditions worldwide, the real estate sector in the UAE has sustained positive performance from July to October 2023.
As outlined in its quarterly economic review for 2023, the Central Bank highlighted that residential transactions in Abu Dhabi experienced a substantial year-on-year increase of 56 percent, reaching AED 67.8 billion in the first nine months of 2023. According to REIDIN, the average sales price of residential properties in Abu Dhabi exhibited a 3.2 percent growth in Q3, 2023, compared to the corresponding period the previous year.
In October 2023, the growth in sales prices accelerated to 3.9 percent year-on-year. The average rent continued its upward trajectory, with a year-on-year increase of 0.8 percent in the third quarter and 2.6 percent in October 2023, following a 0.5 percent year-on-year increase in Q2 2023. Consequently, the average rental yield stood at 6.2 percent in Q3 2023, remaining relatively steady compared to the 6.3 percent recorded in October.
The report further noted, based on Dubai Land Department (DLD) data, that the value of real estate transactions in Dubai surged by 37 percent year-on-year, surpassing AED 500 billion in the first 10 months of the year. The volume of transactions during the initial three quarters increased by 36 percent year-on-year, totaling more than 116,000 transactions.
The number of new investors in Dubai’s real estate market increased by 15 percent year-on-year in the first three quarters of 2023 compared to the same period in 2022. The average residential property sale price in Dubai saw a marginal year-on-year increase of 0.3 percent in Q3 2023. Meanwhile, average rent increased by 12 percent year-on-year in Q3 2023, slowing to 5.7 percent year-on-year in October. This resulted in an average rental yield of 8.8 percent in Q3 2023, maintaining stability compared to the 8.7 percent recorded in October.
Regarding tourism and hospitality, the report highlighted the initiation of the National Tourism Strategy 2031 in the UAE as part of the “Projects of the 50,” with the goal of becoming a top global tourism destination by 2031. The plan aims to increase the tourism sector’s contribution to GDP by AED 450 billion, attract investments worth AED 100 billion, and host 40 million hotel guests annually by 2031.
In the first eight months of 2023, Abu Dhabi’s hospitality sector exhibited robust performance, with the total number of hotel guests reaching 3.2 million, a 31 percent increase compared to the previous year. Hotel occupancy rates stood at 70 percent, with guests staying an average of 2.6 nights.
The CBUAE report highlighted that the data for the first three quarters of 2023 indicates Dubai’s continued prominence as a global tourism hub. Hotel occupancy increased to 75.7 percent, showing a 4.9 percentage point rise from the same period in 2022 and surpassing 2019 figures by 2.3 percentage points. Although the average stay per guest decreased from 4 to 3.7 nights, the total number of occupied room nights saw a year-on-year increase of 13 percent in 2023, reaching 30.4 million nights, a 32 percent growth from 2019.
Additionally, Abu Dhabi International Airport experienced a significant surge in passenger traffic, reaching almost 6 million passengers in Q3 2023, a 29.3 percent year-on-year increase. The airport also recorded 37,903 aircraft movements in Q3 2023, a 21.8 percent increase from Q3 2022. Abu Dhabi’s global connectivity expanded with 119 destinations accessible via 24 airlines from the airport in the third quarter of 2023, with the most frequented routes being to London, Mumbai, and Kochi. Furthermore, the opening of Terminal A in November 2023 is anticipated to significantly enhance the airport’s overall capacity.
Dubai Airports has revised its 2023 forecast, expecting 86.8 million passengers, an increase from the previously anticipated 85 million. This adjustment indicates that Dubai International Airport is poised to surpass its pre-pandemic passenger traffic of 86.3 million in 2019. In the first three quarters of the year, the airport managed 64.5 million passengers, with a notable 22.9 million recorded in Q3, reflecting a 39.3 percent increase from the same period in 2022 and a 1 percent increase from 2019 during peak summer travel.