As a traditional oil-exporting nation, the United Arab Emirates (UAE) is currently experiencing a period of rapid development in the real estate sector. The latest data reveals significant growth in non-oil sectors in cities like Abu Dhabi and Dubai during 2023 H1. In Abu Dhabi, the non-oil sector saw a year-on-year growth rate of 6%, with the real estate and construction sectors experiencing a remarkable growth rate of 17%, contributing to 8.5% of Abu Dhabi's total GDP. In Dubai, during 2023 H1, the real estate and construction sectors witnessed year-on-year growth rates of 3.6% and 1.9% respectively, accounting for a total of 14.4% of Dubai's GDP.

Dubai's real estate market has surged to new heights post-pandemic. Statistics indicate that in 2023, real estate transaction volume in Dubai amounted to 133,000, marking a 38% year-on-year increase, more than triple the pre-pandemic transaction volume in 2019. Among these transactions, existing transactions accounted for 48.3% of the total, while off-plan properties made up the remaining 51.7%.

Figure 1 Total real estate transaction volume in Dubai 2019-2023

In terms of transaction value, Dubai's real estate market also reached new heights in 2023. Total real estate transactions in Dubai amounted to 411.7 billion AED (approximately 112.1 billion USD), marking a 56% year-on-year increase and reaching five times the pre-pandemic levels of 2019.

Figure 2 Total real estate transaction value in Dubai 2019-2023(billion AED)

Against the backdrop of global economic uncertainty, economic sentiment remains optimistic in the Middle East. Particularly in the UAE and Saudi Arabia, both countries have seen significant growth in non-oil sectors, which has further propelled the development of the real estate industry. Despite adopting flexible work models post-pandemic, prime-grade office vacancy rates in key locations in the UAE remain 5% below, providing strong support for commercial real estate. Additionally, inflows of global capital, coupled with favorable tax rates and open immigration policies, have been crucial drivers for the rapid growth of Dubai's real estate industry. Research indicates that India and the UK were the main buyers in Dubai's real estate market in 2023. Buyers from Egypt, Lebanon, Pakistan, and Turkey have also shown significant increases.

While some institutions express concerns about overheating in Dubai's real estate industry, data from the first quarter of 2024 indicates continued growth. According to Dxbinteract, total real estate sales in Dubai for the first quarter of 2024 amounted to 36,000 transactions, marking an 18% year-on-year increase. Total transaction value reached 108.2 billion AED (approximately 29.5 billion USD), reflecting a 22% year-on-year growth. Notably, total transaction value in March 2024 reached a historic high of 36.67 billion AED, despite the onset of Ramadan on March 11th, traditionally associated with less business activity. This new record demonstrates the unstoppable momentum of the real estate industry in the Middle East.