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As the year draws to a close, analysts and economists are beginning to share their predictions for the future. Below, we'll share some of the key trends in the UAE real estate market in 2024. However, let's start with the topic of ecology and "green real estate", which will be a defining factor for everything that will happen in the industry in the coming years. From November 30 to December 12, 2023, Dubai will host the United Nations Climate Change Conference, an extremely important, if not always effective, event that will bring together tens of thousands of people and representatives from nearly 200 countries to discuss strategies to combat accelerating climate change.
Content:
- Increasing digitalization of real estate
- Endless development of the luxury sector
- The office sector after the pandemic
During this conference, much attention was paid to the real estate sector, which is responsible for 40% of the world's carbon emissions. Given the role of real estate in the human impact on the climate, the development of green technologies, construction methods, and environmentally friendly materials is at the forefront. Several countries are already actively moving in this direction, with the UAE itself ranking among the top five global leaders in green real estate. Moreover, the UAE is not only concerned with benefiting nature, but also with global prestige. As a result, experts expect the local market to evolve in this direction by 2024. There will be even more new eco-friendly properties and rising prices.
Increasing digitalization of real estate
Another major trend that goes hand in hand with the green agenda is the increasing digitalization of real estate in the UAE. While not always successful, the UAE is constantly striving to be at the forefront of adopting new technologies in both the construction and sales sectors. Some market experiments, such as NFTs, have been unsuccessful, but others, such as the ability to finance purchases with cryptocurrency, have become firmly established in the market.
In the coming year, we can expect to see an increase in the number of companies using cryptocurrency in their business, as well as VR and AR technologies for property presentations and remote viewing for buyers. Automation and robotics in construction will be funded, leading to cost savings. Artificial intelligence (neural networks) is likely to be used to cut red tape in real estate transactions.
The rise of the proptech sector and AI integration
AI in general should be noted as the primary factor driving the market development in the future. Its penetration into the local market has only recently begun, but it has already significantly simplified the process of searching and selecting offers for individual buyers. The use of neural networks will be more integrated into real estate valuation, asset management, and interaction between the private sector and the government. A separate sub-sector of the market, called proptech, is already emerging. Companies in this sector focus specifically on providing modern technology to solve traditional problems. The UAE authorities have already approved the "National Artificial Intelligence Development Strategy" until 2031. It is reasonable to expect new subsidized initiatives from the government.
Endless development of the luxury sector
Analysts agree that in 2024, Dubai and the UAE as a whole will continue to attract tourists, investors and migrants in ever-increasing numbers. Wealthy investors and buyers from China and India will play a special role in the real estate market. As of now, before 2023, Dubai can boast a revenue of $4.91 billion from sales in the luxury market. Of this amount, $1.59 billion came from the sale of homes priced at $10 million and above, just for the third quarter of the year. Emaar Properties, the leader in Dubai's luxury residential market, points out that Chinese investment in its projects has doubled. Chinese buyers accounted for 7% of all transactions completed by the developer.
Investors will continue to flock to the emirate in 2024 as prices for luxury homes in the local market remain much more attractive compared to competitors such as London and New York. Today, you can buy a 105-square-meter home in Dubai for $1 million, while London and New York offer 33 and 34 square meters, respectively. Another trend in the luxury real estate sector that will continue to develop is the growth of branded apartments and townhouses.
The office sector after the pandemic
Finally, experts point to the office sector of the UAE market. Although the pandemic led to tectonic shifts in the way companies operate and employ people, the world is gradually trying to return to old business rules. Remote working has been at its peak in recent years, influencing developers' preferences in selecting projects to work on. However, hybrid employment systems are now playing an increasingly important role, requiring flexible office space. More emphasis is being placed on Class "A" and "B" offices, built with environmental and comfort requirements in mind. "Hotel-style offices are attracting tenants who need workspaces that allow people to move seamlessly between home and work.
