The real estate market in the UAE is a leading growth sector

The UAE has been making waves in the global real estate market for several years now, and its growth trajectory shows no signs of slowing down. With a strong outlook for growth and upward trends in foreign property investment, it is clear that the UAE is leading the way in the region's real estate sector.

A growth sector core to UAE's economic diversification

The country has worked hard to reduce its reliance on oil revenues and create a more diversified economy, with real estate playing a significant role in this effort. The sector has been a key driver of economic growth in recent years, contributing significantly to the country's GDP. 

The UAE’s property market generates around 5.5% of the country’s GDP, with an upwards trend since 2022 with a rise in rentals and property prices. “Transaction volume in the first quarter of 2022 in Dubai touched its highest total for the first quarter ever recorded in the region.”

The UAE is poised to overtake Saudi Arabia as the leader in real estate market holding an estimated 21.6% of the GCC’s market share. Before the end of the decade the emirates is on track to supply one million new households.

Tapping foreign investment 

One of the reasons why the real estate market has been so successful in the UAE is the government's proactive approach to encouraging foreign investment. 

The CBRE has forecasted a strong outlook for the real estate market in 2023 as Dubai witnessed deals surging 43% year-on-year from February 2022, due to high demand from foreign investors and end-users. 

The emirates have created an investor-friendly environment, with measures such as freehold ownership and no restrictions on repatriation of profits. High rental yields coupled with affordability, relaxed visa policies and long-term plans of urban and sustainable development has attracted investors from all over the world, including high-net-worth individuals, institutional investors, and sovereign wealth funds who are incentivized by a steady stream of income. 

Evolution of property preference: sustainable property in high demand

We are seeing an interesting evolution in property preference, with 70% of UAE real estate investors seeking sustainable property and willing to pay more for ‘green’ buildings. 

The UAE Net Zero 2050 is one of many environmental initiatives that is set to bolster the emirates sustainable real estate sector.

In fact, The UAE is leading in ESG trends among GCC countries with the highest share of green buildings in the Middle East and North Africa. 

This investor trend will only gain strength as there is a growing awareness of environmental issues and a desire to reduce carbon footprints. Developers in the UAE have been quick to respond to this trend, with a range of sustainable property options now available in the market.

These include green buildings, which use environmentally friendly materials and technologies to reduce energy consumption and lifecycle impacts, and smart buildings, which use advanced technology to optimize energy usage and reduce waste. In addition, there has been a significant increase in the number of properties that incorporate renewable energy sources. 

Overall, the UAE's real estate market is a key factor in the country's economic diversification strategy. The government has taken proactive measures to attract foreign investment, offering sustainable property options and favorable growth trends. These factors have made the UAE an appealing destination for property investors worldwide. Moving forward into 2023, it is evident that the real estate market will remain pivotal in driving economic growth and development in the UAE.