The Middle East’s economy and real estate sector have showcased robust performances, driven by substantial expansion in the non-oil sector, particularly in Saudi Arabia and the UAE. The construction and real estate sectors have emerged as pivotal players in this transition from oil dependency. Experts see that the UAE is poised to achieve 5% growth this year, with the non-oil sector contributing 73% to the GDP. Experts also forecast solid rental growth in the office sector due to low vacancy rates, with Grade A office vacancy rates in vital prime locations across the UAE remaining below 5%. However, growth in the residential rental sector in the UAE may moderate due to new launches and handovers.
In Dubai, recent updates to the Real Estate Regulatory Authority (RERA) rent calculator have caused changes in the housing market. Experts describe it as a double-edged sword, as rents are expected to rise while new opportunities emerge.
The recalibrated calculator was launched on March 1st to accurately reflect current market rates by comparing properties in similar areas based on location, property type, and size. This adjustment will likely bring rental rates closer to market norms, providing better returns for landlords.
Although rents rose by 19% in 2023, the increase has slowed compared to previous years. Many tenants have chosen to stay in their current homes during renewals to avoid hefty rent hikes. However, with the recalibrated calculator, some may face higher rents this year.
How TME Services Can Support You Regarding the Real Estate Market
The rent increase is expected to be balanced by the growth of neighborhoods offering better deals as tenants seek better value for their money. This shift may also encourage more tenants to become homeowners, promoting stability in Dubai’s property market in the long run.
At TME Services, our team of 45 experts is ready to help your business make the most of these opportunities. With over 18 years of experience in the UAE and the Middle East, we specialize in legal, tax, accounting, and compliance matters.
