Middle Eastern coastal towns transition to permanent communities

JEDDAH: The UAE’s real estate market ended 2024 on a strong note, with Dubai’s residential sales alone soared 30 percent year on year to 119 billion dirhams ($32.4 billion) in the fourth quarter. 

According to CBRE Middle East’s latest market review, property transactions surged and rental prices climbed across key sectors — commercial, residential, retail, and industrial — driven by strong economic expansion and investor demand. 

The UAE real estate market saw strong growth in 2024, driven by rising demand, limited supply, and increasing prices across residential, commercial, retail, and industrial sectors, supported by new regulations. 

This trend is part of a broader regional shift, with property markets in Saudi Arabia, Qatar, and the UAE implementing reforms to better meet global investor demand.

For example, Saudi Arabia recently allowed foreigners to invest in Saudi-listed companies that own real estate in Makkah and Madinah, following a key decision by the Kingdom’s Capital Market Authority. 

“The UAE’s real estate market continue to attract rising foreign investor interest, supporting record residential transactional volumes across Dubai and Abu Dhabi during 2024. Commercial sectors also remain buoyant, with demand largely outstripping supply, as reflected in the rising occupancy and rental rates across the office, retail and industrial markets,” said Matthew Green, head of research MENA at CBRE.  

In the fourth quarter, residential transactions in Abu Dhabi rose by 19 percent, while office occupancy rates in both Dubai and the capital city hit 94 percent, pushing rents up by 15-20 percent annually due to supply constraints. 

“Amid these highly positive market dynamics, the UAE government has moved to ensure the long-term sustainability of the real estate market, by implementing several new regulations in recent weeks,” said Green.  

He said that these changes were aimed at improving transparency through the Dubai Smart Rental Index, expanding the addressable market via recent changes to Dubai’s designated Freehold areas, and cooling the off-plan market through the UAE Central Bank’s amendment to lending regulations on transactional set-up fees. 

The UAE’s economic growth further fueled the commercial market, with Abu Dhabi’s real gross domestic product expanding by 4.5 percent in the third quarter of 2024, driven by a 6.6 percent increase in non-oil sectors. The rise in new business licenses and corporate expansions drove strong tenant demand, particularly for premium office spaces, the report added. 

Residential sector  

Dubai’s residential sector saw an 18 percent rise in apartment prices and a 20 percent increase in villa prices, pushing average values to 1,647 dirhams and 2,024 dirhams per sq. foot, respectively. Transaction volumes soared, with total residential sales in 2024 reaching 434 billion dirhams, up 33 percent from 2023, the report noted. 

Abu Dhabi’s residential market followed suit, with apartment prices rising 11 percent and villa prices climbing 12 percent. The capital’s sales activity was led by a 59 percent surge in ready property transactions, while off-plan sales grew 5 percent but still accounted for 66 percent of total volume. 

Rental contract registrations in Dubai rose 7 percent year on year, with renewal contracts up 9 percent and new registrations increasing 5 percent. Despite rising costs, CBRE noted that tenants continued to prefer lease renewals to avoid steep rent hikes. 

RIYADH: Egyptians working abroad sent around $2.6 billion in remittances in November, a 65.4 percent annual increase, according to official data.

The nation’s central bank stated that the surge reflects the impact of economic reform measures implemented in March, including fully floating the Egyptian pound, therefore allowing its value to be determined by market forces. 

This move was part of an agreement with the International Monetary Fund to secure an $8 billion loan aimed at stabilizing the economy. 

Following the flotation, the pound’s value decreased significantly, leading to increased prices for imported goods and contributing to higher inflation rates. 

The sharp decline in the pound’s value and rising inflation have driven more Egyptians to seek opportunities abroad, aiming to earn in stronger foreign currencies and mitigate the impact of economic instability at home. 

Between July and November, remittance inflows increased by 77 percent year-on-year, totaling around $13.8 billion, up from $7.8 billion during the same period last year, according to the Central Bank of Egypt.

From January last year to November, the total money sent back to the country from expats saw an annual increase of 47.1 percent to about $26.3 billion.

The steady growth in remittances is a key factor in supporting Egypt’s foreign currency reserves — which saw notable gains last year — and stabilizing the economy amid ongoing fiscal and monetary adjustments. 

Egypt’s net international reserves have also seen consistent growth alongside rising inflows from Egyptians working abroad. 

The CBE announced that NIRs increased by $157 million in December, reaching a record high of $47.1 billion. 

This marks a continuation of steady monthly gains, with reserves rising from $46.94 billion in October to $46.95 billion in November. On a year-on-year basis, Egypt’s foreign exchange reserves grew by $11.9 billion in 2024, up from $35.22 billion in December 2023. 

The number of Egyptians living abroad varies between 12 million to 14 million according to a range of reports, with the highest number of expats in the Gulf Cooperation Council. 

In the fiscal year 2023/24, Egypt achieved a primary budget surplus of 6.1 percent of its gross domestic product, indicating that revenues exceeded expenditures before accounting for interest payments. 

However, after including interest obligations, the country faced an overall budget deficit of 3.6 percent of GDP. This highlights the significant burden of Egypt’s debt servicing on its primary budget.