The UAE's property market growth continues to accelerate, supported by robust demand, healthy economic growth, and strong foreign interest.

Table of Contents

• Housing Market Snapshot
• Historic Perspective
• Demand Highlights
• Supply Highlights
• Rental Market
• Mortgage Market
• Socio-Economic Context

Housing Market Snapshot

Dubai's all-residential property price index (RPPI) rose strongly by 19.46% year-on-year (15.97% inflation-adjusted) in November 2024, based on figures released by Reidin.com. This followed annual increases of 20.14% in 2023, 9.53% in 2022, and 9.25% in 2021. And y-o-y declines of 7.12% in 2020, 6% in 2019, and 8.56% in 2018. Residential property prices have been rising by double-digit figures since January 2023.

Dubai residential property prices were up by 2.18% in the three months to November 2024 (1.55% inflation-adjusted).

By property type:

• Apartment prices in Dubai surged by 19.43% (15.83% inflation-adjusted) during the year to November 2024, at par with the prior year's 18.33% growth. Apartment prices were up by 1.94% (1.31% inflation-adjusted) q-o-q in November 2024.
• Villa prices increased sharply by 20.28% (16.77% inflation-adjusted) y-o-y in November 2024, following a whopping 22.23% growth in the prior year. On a quarterly basis, prices rose by 3.32% (2.68% inflation-adjusted) in November 2024.

In Dubai's primary market, the average purchase price of residential properties reached AED1,558 (US$424) per square feet (sq. ft) in Q3 2024. On the other hand, the average purchase price in the secondary market was AED1,332 (US$363) per sq. ft over the same period.

The United Arab Emirates house price annual change

Abu Dhabi's house price growth is more subdued, with the all-residential property price index rising by 10.16% (6.94% inflation-adjusted) in November 2024 from a year earlier. During the three months to November 2024, prices were up by a modest 2.18% (1.54% inflation-adjusted).

By property type:

• Apartment prices in Abu Dhabi increased by 9.88% (6.67% inflation-adjusted) during the year to November 2024, an acceleration from a modest growth of 2.83% in the same period last year. Prices were up by 2.11% (1.48% inflation-adjusted) q-o-q in November 2024.
• Villa prices rose by 11.51% (8.25% inflation-adjusted) in November 2024 from a year earlier, after increasing by 10.05% a year ago. Quarter-on-quarter, prices were up modestly by 2.46% (1.83% inflation-adjusted).

ValuStrat also showed a similar pattern. Dubai's ValuStrat price index, which tracks residential capital values in the emirate, rose by a whopping 28.9% y-o-y in Q3 2024 and by 6.7% q-o-q. Abu Dhabi's ValuStrat price index, on the other hand, registered a more conservative house price growth in Q3 2024, of 5.3% annually and 1.7% quarterly.

Demand continues to surge. In Dubai, the total number of real estate transactions reached a record 180,987 deals in 2024, up by a huge 36.5% from the prior year, according to Property Finder. In Abu Dhabi, transaction volume increased to a record high of 14,662 units last year, higher by a modest 4% as compared to the prior year.

In UAE's four emirates - Abu Dhabi, Dubai, Sharjah, and Ajman, the total value of real estate transactions reached about AED 893 billion (US$243.1 billion) in 2024, with over 331,300 transactions registered.

"The residential sector continues to perform strongly, driven by resilient demand for new quality living spaces," said JLL MENA. "Looking ahead, sales prices are projected to continue to record strong rates of growth, although some areas may experience more moderate growth in comparison to recent levels."

The housing market is poised for continued strong growth in the medium term, fueled by surging property demand, healthy economic expansion, and the country's continued attractiveness as a global investment hub.

"Dubai remains one of the world's most attractive investment destinations due to its stable economy, strong financial fundamentals, and ability to constantly find new opportunities for growth," said Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of Dubai Executive Council.

"Moreover, global investors, institutions, and businesses continue to have high confidence in Dubai's economy due to its growing profile as one of the best metropolises to live and work, its exceptional infrastructure, and supportive regulations," he added.

The UAE economy grew by about 4% in 2024 from a year earlier, following expansions of 3.6% in 2023, 7.5% in 2022 and 4.4% in 2021 and a pandemic-induced contraction of 5% in 2020. The growth last year was mainly driven by continued diversification efforts, particularly in non-oil sectors such as tourism, real estate, trade, and financial services. The country also benefits from higher oil prices in early 2024 and significant infrastructure investments, particularly related to the Dubai Expo legacy and the UAE's broader Vision 2030 initiatives.

However, growth is somewhat tempered by global economic uncertainties, volatile crude oil prices, and regional geopolitical risks.

The International Monetary Fund (IMF) expects the UAE economy to expand by an annual average of 5% this year and in 2025, while the World Bank's forecast is more conservative, at an average of 4.1% growth annually in the next two years.

UAE is one of the richest countries in the world, with a GDP per capita (PPP) of US$77,251 in 2024, based on IMF figures.

Historic Perspective:

Housing market cycle

From 2002 to 2008, Dubai's property prices almost quadrupled, as Dubai became one of the world's fastest-growing cities. After March 2006, a deluge of foreign money boosted Dubai's ambitions following the passage of the long-awaited foreign property ownership law.

Billions of dollars were spent on mega-projects including Jumeirah Garden City (estimated cost: US$95 billion), Dubailand (US$64 billion), The Lagoons (US$25 billion), Palm Jumeirah (US$14 billion), and The World (US$14 billion).

Then the global credit crunch hit at the end of 2008.

Transaction volumes plummeted. Almost half of construction projects in the UAE, worth around AED1.1 trillion (US$300 billion), were either put on hold or canceled.

As the economy returned to growth, halted construction projects were resumed. From January 2012 to end-2014 Dubai experienced skyrocketing house prices, averaging 21.5% annually. However, house price growth in Dubai slowed by the end of 2014.

The housing market has been depressed since.

• In 2015, Dubai's all-residential property price index (RPPI) fell by 11% (-14.1% inflation-adjusted), according to DubaiLand.com.
• In 2016, house prices fell by 0.4% (-2.9% inflation-adjusted) in Dubai.
• In 2017, house prices fell by 3.9% (-5.2% inflation-adjusted) in Dubai.
• In 2018, Dubai house prices dropped by 8.6% (-8.2% inflation-adjusted).
• In 2019, Dubai house prices fell by 6% (-4.1% inflation-adjusted).
• In 2020, Dubai house prices fell by 7.1% (-2.9% inflation-adjusted).

The enormous excess supply of apartments was pulling the market down. Other factors that contributed to the decline of the housing market during the said years included:

• the Federal Mortgage Cap, introduced in 2013, slowed residential price rises in Abu Dhabi and Dubai.
• the implementation of a 5% value-added tax (VAT) in January 2018, which applies to home sales after three years of the project's completion. Sales within three years of completion have a 0% VAT rate.
• the Dubai Land Department doubled property registration fees from 2% to 4% to dampen property demand.
• the adverse impact of the Covid-19 pandemic on both the demand and supply side of the housing market.

The housing market started to recover in 2021, as activity slowly returned to its pre-pandemic levels. Dubai house prices rose by 9.25% while Abu Dhabi prices increased by 1.56%. The trend continued in 2022, with Dubai house prices rising by another 9.53% while they increased by just 1.46% in Abu Dhabi.

The housing market continued to gather pace in the succeeding two years, buoyed by robust demand. Dubai prices rose strongly by an annual average of about 20% in 2023-24, while Abu Dhabi prices increased by an average of 8% over the same period.

Demand Highlights:

Dubai's property transaction growth accelerating

Demand continues to increase strongly in Dubai. During 2024, the total number of real estate transactions reached a record 180,987 deals, up by a huge 36.5% from the prior year, according to Property Finder. Likewise, real estate transaction value in Dubai, which includes deals for apartments, villas, commercial properties, and plots, totaled AED 522.5 billion (US$142.25 billion) last year, up by 27.2% as compared to 2023.

Off-plan transaction volume jumped 60.6% y-o-y to 109,527 deals in 2024 while off-plan transaction value was up by 43.5% y-o-y to AED228.03 billion (US$62.08 billion).

Last year, there was notable momentum in both sales transactions and overall market activity, especially within the off-plan property sector. The continued strategic emphasis on off-plan sales has contributed significantly to the overall transaction volume, underscoring investor confidence in upcoming developments and the market's resilience. While off-plan transactions dominate the market, the secondary property sector also remains robust, sustaining a steady level of activity.

By property type, based on figures released earlier by Reidin.com:

• Apartment sales transactions: 102,800 units were sold in Q1-Q3 2024, up by more than 40% compared to the same period in the prior year.
• Villa and townhouse sales transactions: 22,900 units were sold in the first three quarters of 2024, up by 18% from a year earlier.

"Dubai's property market continues to gather pace. Once again, records have been broken and new milestones have been reached, reflecting sustained confidence from local and international investors and cementing Dubai's position as a force to be reckoned with on the global scene," said Henry Bacha, CEO of Property Monitor.

Robust demand in Abu Dhabi

During 2024, the total number of transactions in Abu Dhabi increased to a record high of 14,662 units, up by 4% as compared to the prior year, according to Property Finder. As a result, total transaction value reached AED47.92 billion (US$13.05 billion) last year.

The strong market performance was primarily buoyed by the remarkable growth in the existing property market, with the volume of transactions for existing properties surging by 53.4% y-o-y to 4,320 units in 2024. Additionally, the total transaction value of existing properties also soared to AED9.27 billion (US$2.52 billion), marking a 34.7% y-o-y rise.

"The Abu Dhabi real estate market is well positioned for growth in the short to medium term. Several factors support this outlook, including a growing interest from new developers entering the Abu Dhabi market, and a significant pipeline of planned residential and mixeduse developments, particularly on Reem Island, which has become increasingly attractive under the Abu Dhabi Global Market (ADGM) jurisdiction," said Asteco in its Q3 2024 Abu Dhabi Real Estate Report.

Better terms for ex-pats have been introduced

In 2019, a new system for long-term residence visas (Golden Visa) for foreign investors and professionals was put in place. It allows expats to live, work, and study in the country without needing a national sponsor. They can also enjoy 100% ownership of their business. These visas will be issued for 5 or 10 years and will be renewed automatically.

Eligibility for a 10-year visa:

• Investors with public investments of at least AED 10 million (US$2.72 million).
• Persons with specialized talents, such as doctors, scientists, specialists, inventors, as well as creative individuals in the field of culture and art.
• Outstanding students.

Eligibility for a 5-year visa:

• Investors in a property in the UAE with a gross value of not less than AED 5 million (US$1.36 million). The amount invested in real estate must not be on a loan basis and the property must be retained for at least 3 years.
• Entrepreneurs with an existing project with a minimum capital of AED 500,000 (US$136,000).

In June 2021, a new 24x7 residency visa service was launched, allowing customers to connect with a service team and follow up on the status of their transactions at any time.

Then in 2022, the UAE government approved new conditions for getting a Golden Visa by investment, with reduced investment amount, no restrictions on the duration of stay in other countries, and an opportunity to buy off-plan properties. Said new rules came into force in October 2023.

• Purchase real estate in the UAE for AED 2 million (US$545,000) to get a 10-year Golden Visa. Another option is buying real estate for AED 750,000 (US$204,000) to obtain a 2-year residence visa.
• Purchase real estate for AED 2 million (US$545,000) to get a 5-year residence visa. Investors may also purchase a property for AED 750,000 (US$204,000) to get a 3-year residence permit.

Foreign homeownership rules are now very liberal

Foreign ownership laws are now very liberal in the UAE, particularly in Dubai and Abu Dhabi.

• Foreign nationals are now allowed to buy freehold properties in designated areas in Dubai.
• Gulf Cooperation Council (GCC) nationals are allowed freehold ownership anywhere in the Emirates.
• Abu Dhabi allows foreigners to own property in designated investment zones on a freehold basis. This followed other market-boosting measures. In 2012, the government compelled public sector employees living outside Abu Dhabi to relocate within the emirate's borders. Then in November 2013, the government canceled a 5% cap on annual rent increases.

Most residential property buyers in Dubai and Abu Dhabi are UAE nationals, followed by Indians, Saudis, British, and Pakistanis.

Supply Highlights:

Housing supply continues to rise

In Dubai, there were an estimated 38,500 new residential completions in 2024, following completions of 39,000 units in 2023, 41,000 units in 2022, 44,000 units in 2021, and 40,000 units in 2020, based on figures released by JLL MENA. This brough the total housing stock in Dubai to around 757,500 units by end-2024.

"In the third quarter, around 7,400 new units were delivered, comprised mainly of apartments, raising total residential stock to 744,000 units. For the remaining quarter, around 13,500 units are scheduled for delivery, spread across various communities including but not limited to Dubailand, Jumeirah Village and MBR City," said JLL MENA's Dubai Living Market Dynamics Q3 2024.

Completions in recent years have been among the highest ever recorded, mainly due to Expo 2020.

In Abu Dhabi, more than 6,000 units were estimated to have been added to the market in 2024, bringing the total housing stock to about 290,100 units.

"During the third quarter of 2024, limited completions of around 100 units were recorded in Abu Dhabi, where the total volume of residential stock stands at approximately 286,600 units. In the last quarter of the year, around 3,500 are scheduled for delivery, which would bring total stock to almost 290,100 units," noted JLL MENA's Abu Dhabi Living Market Dynamics Q3 2024.

Rental Market:

Rental yields in Dubai and Abu Dhabi are moderate to good

In Dubai, gross rental yields are good, averaging 6.97% in November 2024, slightly down from 7.13% a year ago, according to Reidin.com. By property type:

• Apartments: rental yields were 7.39% in November 2024, not significantly different from 7.52% in November 2023.
• Villas: rental yields stood at 5.26%, down from 5.61% in the previous year.

In Abu Dhabi, gross rental yields were slightly lower than that of Dubai, but remain relatively good at an average of 6.75% in November 2024 - up from 6.27% a year earlier.

• Apartments: gross rental yields stood at an average of 7.29% in November 2024, up from 6.65% in the same period in the prior year.
• Villas: rental yields were 5% in November 2024, almost unchanged from 5.08% a year ago.

A recent study conducted by the Global Property Guide showed that gross rental yields in the UAE averaged 4.87% in Q4 2024, as compared to 5.16% in Q1 2024, and 4.93% in Q3 2023. Gross rental yields in Dubai and Abu Dhabi are higher than the national average, at 6.4% and 5.79%, respectively.

Yields in Dubai are good, but the days when Dubai generated stratospheric yields are gone. Also, this can be a volatile market. Home prices swing up and down frequently.

Yields are lower in other emirates and cities. Raz al Khaimah yields averaged 2.64% in Q4 2024; Ajman at 5.26%; and Sharjah at 4.26%.

Rents surging in Dubai and Abu Dhabi

Rental rates of residential properties are surging in both Dubai and Abu Dhabi, according to Reidin.com.

• In Dubai, rental rates for all residential units were up by a whopping 16.85% in November 2024 from a year earlier. Rental rates for apartments surged by 17.36% y-o-y, while rents for villas increased 12.92% y-o-y over the same period.
• In Abu Dhabi, the average rental rate for all residential units increased strongly by 18.35% y-o-y in November 2024. Over the same period, rental rates for apartments accelerated by 20.1%, while it increased by 9.68% for villas.

The increasing rents in the UAE can be attributed to strong demand, which was reflected in the continued increase in rental contracts.

"Rental contracts signed this quarter saw a sharp 32% increase compared to the previous quarter, with renewed contracts experiencing an 11% increase," noted Reidin's Q3 2024 report. "The total number of contracts, combining both new and renewals, grew by 18% compared to the previous quarter and saw a 13% increase year-on-year. This reflects a growing influx of expatriates moving to Dubai."

Accordingly, Jumeirah Village Circle, International City, and Business Bay are the three leading freehold areas for rental transactions.

This is in line with the figures released by Asteco, which showed that average apartment and villa rents in Dubai rose strongly by 15% and 14% y-o-y, respectively, in 2023. In Q3 2024, apartment rents in the emirate were up by 8% from a year earlier while villa rents increased by 7%.

"This increase can be partially attributed to the updated RERA rental index, which has given certain landlords the flexibility to request larger rent increases upon lease renewal," said Asteco in its Q3 2024 UAE Real Estate Report.

"Affordable communities continued to lead rental growth in relative terms. This trend emphasizes the demand for 'affordable' housing options, with price considerations being a significant factor for many tenants. Consequently, whilst landlords in these areas experienced increased interest, occupancy, and rental rates, prospective tenants remained highly price-sensitive. As a result, attracting and retaining tenants in more upscale locations may become challenging," added the Asteco report.

Rents in specific high-end developments in Dubai in Q3 2024:

• At the DIFC, a special economic zone in Dubai, rents ranged from an average of AED135,000 (US$36,754) per annum for one-bedroom apartments to AED250,000 (US$68,064) for three-bedroom apartments.
• In Downtown Dubai, home to the towering Burj Khalifa skyscraper rents for one-bedroom apartments averaged AED137,500 (US$37,435) per annum, while rents for three-bedroom apartments stood at AED280,000 (US$76,231).
• In Palm Jumeirah, the world's largest man-made island, rents ranged from AED175,000 (US$47,645) per annum for one-bedroom apartments to AED350,000 (US$95,289) for three-bedroom apartments.
• In Sheikh Zayed Road, home to most of Dubai's skyscrapers including the Emirates Towers, rents ranged from AED 95,000 (US$25,864) per annum for one-bedroom apartments to AED 160,000 (US$43,561) for three-bedroom apartments.

In Abu Dhabi, the apartment rental market has also been growing, but more modestly, with the rental rates of both apartments and villas increasing by an average of 4% y-o-y in Q3 2024.

"The residential rental market in Abu Dhabi maintained its positive momentum during the third quarter, with landlords retaining an advantage due to robust leasing activity fuelled by localized demand," said the Asteco report. "A significant development in the Abu Dhabi real estate market during Q3 2024 was the official launch of the Abu Dhabi Rental Index by the Abu Dhabi Real Estate Centre (ADREC). This tool is expected to foster transparency and accountability in the market, empowering stakeholders to make informed decisions. Its potential impact on international investor sentiment is also anticipated to be positive, as it provides greater clarity and stability to the rental market."

Rents for high-end properties in Abu Dhabi in Q3 2024:

• In Central Abu Dhabi, annual rents for one-bedroom apartments averaged AED 60,000 (US$16,335); two-bedroom apartments for AED 107,500 (US$29,267); and three-bedroom apartments for AED 137,500 (US$37,435).
• In Corniche, annual rents ranged from AED 69,000 (US$18,786) for one-bedroom apartments to AED 147,500 (US$40,158) for three-bedroom apartments.
• In Al Khalidiya/Al Bateen, annual rents ranged from AED 75,000 (US$20,419) for one-bedroom apartments to AED 162,500 (US$44,241) for three-bedroom apartments.
• In Al Raha Beach, annual rents were from AED 80,000 (US$21,780) for one-bedroom apartments to AED 177,500 (US$48,325) for three-bedroom apartments.
• At Marina Square, one-bedroom apartments were rented for AED 65,000 (US$17,697) per year, and three-bedroom apartments for AED 135,000 (US$36,754).

Rental laws

The Real Estate Regulatory Agency (RERA) is the regulatory branch of the Dubai Land Department (DLD) that is in charge of implementing tenancy rules and regulating the relationship between the landlord and tenant. The four main tenancy laws in Dubai include:

• Law No. 26 of 2007: regulates the relationship between landlords and tenants in Dubai.
• Law No. 33 of 2008: amended certain provisions of Law No. 26.
• Decree No. 26 of 2013: established the Rent Disputes Settlement Centre (RDSC), which supervises all types of rental disputes in Dubai.
• Decree No. 43 of 2013: governs rent increases in Dubai.

Since December 2013 rent caps have been imposed by Dubai Decree No. 43/2013 (the "New Decree"). The rent cap also applies to special development areas and free zones, including the Dubai International Financial Centre (DIFC).

In 2024, rent increases were as follows:

However, landlords can increase rents only at the time of renewal of the lease. The DLD requires landlords to provide tenants with at least 90-day notice before the rent increase.

Then a new law came into effect on September 19, 2024 that freezes rents in Dubai for three years. Subsequent rent increases are regulated by market rates as determined by the Executive Council.

"Landlords cannot increase rent within the first three years of the rental agreement unless mutually agreed upon. If a rent increase occurs before this period ends, further increases cannot happen for another two years. Any subsequent rent increase must reflect fair market value, with specific guidelines provided in the law's executive regulations," said Reda Hegazy, a partner at Alsuwaidi and Company Advocates and Legal Consultants.

At the start of the year 2025, the Dubai Land Department introduced the Smart Rental Index which covers all residential areas across the emirate including districts, special development zones, and free zones. The updated index features a star rating system, as well as data on both new and older buildings, average rents for specific areas, and individual buildings. This initiative aims to create a more equitable rental market by linking property ratings to rental values. Residential buildings are rated on a scale from one to five stars based on over 60 criteria, which directly influence permissible rent increases.

In Abu Dhabi, the 5% annual rent cap remains in force, which was reinstated in December 2016 after it had been abolished in 2013. Further in October 2018, the Abu Dhabi Judicial Department issued new rules that will make it easier for landlords to evict tenants. The new rules allow landlords with lease contracts registered with Abu Dhabi Municipality to approach the Enforcement Department directly to claim outstanding rent and repossess their property. Previously, landlords had to go through a legal process to evict a tenant, which typically takes up to 6 months.

Abu Dhabi has also strengthened the protection of off-plan buyers. Its recent real estate law (No. 3 of 2015) appoints Abu Dhabi's Department of Municipal Affairs (DMA) as the real estate regulator, performing the same functions as Dubai's RERA. The reforms, as outlined by The National, include:

• A central government database/register for all property projects in Abu Dhabi, including off-plan sales;
• Developers are only allowed to charge DMA-approved administrative fees, and are barred from collecting registration fees from investors;
• Rules are laid down for the creation of owners' associations;
• Developers are only allowed to sell off-plan units if they own real estate right over the project land. A "disclosure statement" is also required, providing information on the development to home buyers.
• Developers marketing off-plan units are required to open an escrow account.
• In case of "substantial prejudice", off-plan buyers can terminate their purchase.
• Developers will be fined by the DMA if their projects are delayed by more than six months. If there is a significant delay, the new law allows for the cancellation of projects or the appointment of a new developer.
• A 10-year liability period for developers regarding structural building defects.

In August 2024, the capital's real estate sector regulator Abu Dhabi Real Estate Centre (ADREC) launched its first official rental index for the emirate. The platform, which caters to both tenants and landlords, offers indicative quarterly rental pricing for properties located in areas across the city and is designed to enhance market transparency, offer indicative rental values, and foster the stability of the capital's expanding real estate market.

Mortgage Market:

Successive key interest rate cuts

In December 2024, the Central Bank of the UAE lowered its key overnight deposit facility by 25 basis points to 4.40%, following the US Fed's decision to cut its fed funds rate for the third consecutive month. Similarly, the recent move also marked its third straight rate cut since September 2024.

The UAE's base rate for overnight deposits is linked to the US Fed's interest on excess reserves (IOER).

Mortgage interest rates in Dubai have, in the past, followed key US Fed rates, because the dirham (AED) is pegged to the US dollar at AED3.67 = US$1. Some banks offer mortgage loans to both nationals and expatriates.

After a surge in mortgage interest rates in the past two years following key rate increases to tame inflation, they are now gradually falling again. Currently, mortgage interest rates in the emirates range from 2% to 6%. The maximum repayment tenure is typically 25 years and the loan amount ranges from AED 8 million (US$2.2 million) to AED 20 million (US$5.4 million).

The mortgage market continues to strengthen

Amidst gradually falling interest rates, the mortgage market continues to expand strongly. During 2024, the total value of mortgage transactions in Dubai reached AED 185.8 billion (US$50.6 billion) through 35,700 real estate dealings. This represents a more than 50% surge in transaction value and about 7% growth in the number of dealings.

This is because cash buyers account for the majority of transactions in Dubai, making the market less sensitive to mortgage interest rate changes. For instance, in Q3 2024, mortgage transactions accounted for 10,118 deals, while cash transactions accounted for 14,977 deals (except off-plan sales) in the emirate, according to ValuStrat. Similarly, total sales value attributed to mortgage transactions stood at AED 19 billion (US$5.2 billion) in Q3 2024, compared to cash transactions totaling AED 28 billion (US$7.6 billion).

In contrast, Abu Dhabi depicts a different scenario, where mortgage transactions are more dominant than cash deals. In Q3 2024, there were 2,594 mortgage transactions in the emirate, as compared to 1,495 cash transactions (excluding off-plan sales). Likewise, the total value of mortgage transactions reached AED 13.5 billion (US$3.7 billion) in Q3 2024, nearly three times the value of cash transactions, which amounted to AED 4.2 billion (US$1.1 billion).

Mortgage rules were introduced in October 2013 to regulate the market:

In March 2020, LTV ratios on mortgages for first-time homebuyers, both for nationals and expatriates, were raised by 5%, to alleviate the economic conditions caused by the Covid-19 pandemic. It remained at that level since.

More fixed-rate mortgage products have been introduced in the last decade, and "Fee-free" products have allowed borrowers to switch to a new lender at a lower cost since the last quarter of 2010.

Socio-Economic Context:

Crude oil prices remain volatile

Brent oil prices reached a decade-high of US$120.08 per barrel in June 2022, amidst the ongoing Russian invasion of Ukraine. However, the international oil market was adversely impacted by the growing rift between Saudi Arabia and UAE in the succeeding year.

With increasing oil prices in 2021, UAE pushed for increased oil production within the OPEC+, so that it can invest in its diversification plan before oil demand dries up. The country was upset about the low baseline from which its production is calculated. Abu Dhabi has invested billions of dollars in recent years to increase its production capacity.

However, Saudi Arabia, OPEC's de facto leader, has refused the said concession, causing a rare public clash between the two allies. Neither side appears ready to budge, clouding the outlook for oil prices. In fact, in March 2023, the UAE was reportedly contemplating leaving the powerful cartel.

But in August 2023, OPEC and its allies agreed to gradually increase oil supplies to the market in 2024, ending the spat between the two oil powerhouses.

After increasing in the first half of 2024, crude oil prices declined again in the second half of last year, due to a combination of factors, including a global economic slowdown, reduced demand from key consumers like China, and an oversupply driven by resilient U.S. shale production and production increases from OPEC+ members. Additionally, high interest rates, a strong U.S. dollar, and the ongoing transition to renewable energy further pressured prices downward.

In December 2024, Brent oil prices fell by 6.4% to an average of US$73.83 per barrel as compared to US$78.86 per barrel in the same period last year. In fact, it is now about 38.5% below the recent peak price level of US$120.08 per barrel seen in June 2022, according to figures released by the World Bank.

The United Arab Eemirates economy remains healthy

The UAE economy grew by about 4% in 2024 from a year earlier, mainly driven by continued diversification efforts, particularly in non-oil sectors such as tourism, real estate, trade, and financial services. The country also benefits from higher oil prices in early 2024 and significant infrastructure investments, particularly related to the Dubai Expo legacy and the UAE's broader Vision 2030 initiatives.

However, growth is somewhat tempered by global economic uncertainties, volatile crude oil prices, and regional geopolitical risks.

Last year's growth followed expansions of 3.6% in 2023, 7.5% in 2022, 4.4% in 2021, and a pandemic-induced contraction of 5% in 2020.

"The economic outlook remains strong, supported by domestic non-hydrocarbon activity, continued reforms and related public spending, and a rapid expansion in hydrocarbon production, led by the UAE's OPEC+ quota increase from 2025," said the International Monetary Fund (IMF).

The IMF expects the UAE economy to expand by an annual average of 5% this year and in 2025, while the World Bank's forecast is more conservative, at an average of 4.1% growth annually in the next two years.

Abu Dhabi remains very dependent on oil revenues while Dubai is more focused on trade, travel, and tourism.

UAE's labor market remains robust. In 2024, the overall unemployment rate was less than 3%, at par with the past three years.

Inflation stood at 3.01% in November 2024, up from 2.38% in the previous month but down from 3.28% in the same period last year, according to the National Bureau of Statistics. Nationwide inflation averaged just 1.1% in 2011-2021 before rising to 4.8% in 2022 and to 3.1% in 2023, based on IMF figures.

Sources:

• United Arab Emirates Residential Property Price Report: November 2024, Results Edition: 192 (Reidin): https://reidin.com/
• Residential Sales Price Index (Dubai Land Department): https://dubailand.gov.ae/
• Dubai & Abu Dhabi Real Estate Market Overview Q3 2024 (Reidin): https://reidin.com/
• Abu Dhabi Living Market Dynamics, Q3 2024 (JLL MENA): https://www.jll-mena.com/
• Dubai Living Market Dynamics, Q3 2024 (JLL MENA): https://www.jll-mena.com/
• UAE Real Estate Market Review Q3 2024 (CBRE): https://mktgdocs.cbre.com/
• Dubai - Real Estate Review Q3 2024 (ValuStrat): https://valustrat.com/
• Abu Dhabi - Real Estate Review Q3 2024 (ValuStrat): https://valustrat.com/
• Dubai & Abu Dhabi Real Estate Market Overview Q3 2024 (Reidin): https://reidin.com/
• UAE real estate sees steady growth in projects, record transactions in 2024 (Hindustan Times): https://www.hindustantimes.com/
• Dubai, Abu Dhabi real estate markets shine in 2024: Property Finder (Gulf Business): https://gulfbusiness.com/
• Dubai real estate market on track for 30 percent sales growth by the end of 2024 (Middle East Economy): https://economymiddleeast.com/
• General provisions for the residence visa (UAE Government Portal): https://u.ae/
• Dubai: New 24x7 residency visa service launched (Khaleej Times): https://www.khaleejtimes.com/
• Dubai draft law to freeze rents for three years 'will stabilize property market' (The National): https://www.thenationalnews.com/
• Sharjah residents: Rent freeze for three years, early termination penalties (Alsuwaidi & Company): https://alsuwaidi.ae/.
• Dubai tenants renegotiate rent increase as the smart rental index is launched (Khaleej Times): https://www.khaleejtimes.com/
• How Dubai's new Smart Rental Index works: All you need to know (Khaleej Times): https://www.khaleejtimes.com/
• Home Loan in UAE (Policy Bazaar): https://www.policybazaar.ae/
• Rental increase (Mondaq): https://www.mondaq.com/
• 10 things to know about Abu Dhabi's new property law (The National): https://www.thenationalnews.com/
• Abu Dhabi rents may 'increase by up to 30%' in some areas after the launch of the rental index (Khaleej Times): https://www.khaleejtimes.com/
• Abu Dhabi launches first official rental index; how to check current rates in your area (Khaleej Times): https://www.khaleejtimes.com/
• UAE Residence Visa (Immigrant Invest): https://immigrantinvest.com/
• Gross rental yields in the United Arab Emirates: Dubai and 4 other cities (Global Property Guide): https://www.globalpropertyguide.com/
• Federal Funds Effective Rate (Federal Reserve Bank of St. Louis): https://fred.stlouisfed.org/
• United Arab Emirates Interest Rate (Trading Economics): https://tradingeconomics.com/
• UAE real estate sees steady growth in projects, record transactions in 2024 (Hindustan Times): https://www.hindustantimes.com/.
• Dubai property sales to hit AED 520 bn in 2024 -W Capital (Enterprise): https://enterprise.news/
• Dubai real estate sets all-time record in 2024 (Emirates News Agency-WAM): https://www.wam.ae/
• UAE real estate: Property market transactions hit $243bn in 2024 (Arabian Business): https://www.arabianbusiness.com/
• UAE real estate transactions reach Dh893 billion in 2024 (Finance Middle East): https://www.financemiddleeast.com/
• Regulations Regarding Mortgage Loans (Central Bank of the UAE): https://rulebook.centralbank.ae/
• UAE: More property buyers to opt for mortgages as interest rates set to drop in 2024 (ValuStrat): https://valustrat.com/
• Commodity Markets (World Bank Group): https://www.worldbank.org/
• UAE GDP projected to grow by 4.1 percent in 2025: World Bank (Emirates News Agency-WAM): https://www.wam.ae/
• IMF Executive Board Concludes 2024 Article IV Consultation with the United Arab Emirates (International Monetary Fund): https://www.imf.org/
• UAE economic growth forecast to hit 5% in 2025 (Zawya): https://www.zawya.com/
• UAE GDP to grow to 3.3 percent in 2024, 4.1 percent in 2025: World Bank (LinkedIn): https://www.linkedin.com/
• United Arab Emirates (International Monetary Fund): https://www.imf.org/
• United Arab Emirates - Dubai Consumer Price Index (CPI) (Trading Economics): https://tradingeconomics.com/