UAE Real Estate Report - H2 2024 Review and H1 2025 Outlook

Executive Summary

UAE’s economic growth is estimated to be positive in 2024 owing to strength in non-oil GDP. The oil GDP in 2024 was affected by reduced oil supply throughout the year, stemming from voluntary production cuts. However, 2025 is expected to bring strong economic growth in the region. The real estate sector witnessed positive momentum in H2 2024. The residential sector recorded strong growth, driven by demand due to the flight-to-quality trend. Residential real estate is expected to witness an uptick in H1 2025 driven by demand for luxury property and lack of quality assets. The growth in the office sector is fueled by real estate growth in the UAE during the quarter and increasing non-oil activity. Rents have surged during the period, with demand being broad-based. The retail sector experienced stable growth owing to the continued supply-demand mismatch, especially for high quality assets. With the increasing attraction of Dubai as an international travel destination, the hospitality sector has performed well, supported by the increase in tourist footfalls in the UAE, as indicated by growth in occupancy rates. The CBUAE is expected to cut interest rates in H1 2025, in line with the U.S Fed. The lowering interest rates in H2 2024 and H1 2025 is likely to stimulate consumer demand.