Despite economic challenges, the real estate sector is powering through in 2024 and will show a lot of resilience. This year, a wave of transformative trends is set to propel the industry toward a smarter, more sustainable, and diversified future.
The state of real estate
According to Precedence Research, the global real estate and infrastructure market surged in 2023, reaching a value of $365.51 trillion. It expanded by about 3.4 percent from the previous year’s $353.52 trillion. This growth — underpinned by the unwavering strength of the residential segment — comes amid a backdrop of high inflation, interest rate fluctuations and geopolitical tensions.
Real estate trends in 2024
Bolstered by tourism and infrastructure investments, the broader Middle East real estate scene is firmly on its trajectory toward further growth. In the region and beyond, the following are the real estate market trends that will define 2024.
Co-living spaces on the rise
There are at least 35 million digital nomads worldwide, and they’re one of the biggest drivers of another big real estate trend to take over 2024: co-living and flexible spaces. These properties redefine traditional living as they are more community-focused, convenient and simple. They allow people to live in a more social environment, providing private spaces along with communal areas like living rooms, kitchens and bathrooms. This unique living arrangement also often emphasizes social engagement and diversity as it hosts opportunities for tenants to interact via various activities like game nights and educational workshops.
As cities grow and living costs increase, co-living is a viable, more affordable alternative.
Heightened digitalization
Real estate transactions once required cumbersome paperwork, but digitalization has made buying and selling properties easier. Online listings enable remote property exploration, simplifying the process for all involved. In 2024, the sector will embrace more emerging technology to improve consumer and supplier experience.
For instance, in a pioneering move, Dubai has allowed the use of digital currencies to acquire properties. One of its most important perks is that it streamlines international deals, making property buying in the city more efficient and cost-effective.
Apart from adopting cryptocurrency, artificial intelligence (AI) will also play a pivotal role in elevating the real estate experience. Entities will continue using AI to perform predictive analytics and help estimate property values and market trends. Others will leverage the 3D modeling technologies to create virtual property tours. Additionally, AI tools will be used to revolutionize mortgage processes, enhancing fraud detection, underwriting and loan servicing tasks.
Read: UAE real estate sector soars in 2023: Market Watch Report
Smart and sustainable development
In 2024, smart technology and sustainability will continue influencing the real estate sector. On a broader scale, experts anticipate that developers and city governments will intensify adopting emerging technologies to enhance the efficiency and sustainability of their infrastructure. They will likely prioritize green and blue infrastructure, like parks and waterways. The goal is to mitigate the impact of climate change on a community level.
This trend is particularly pronounced in the Middle East and North Africa (MENA). In the region, the United Arab Emirates (UAE) and Saudi Arabia are heavily investing in smart city projects. Notable examples include UAE’s Masdar City and Saudi’s NEOM project.
This shift aligns with the initiatives that the recently held COP28 champions. During the landmark conference, 28 countries signed the Buildings Breakthrough initiative. It aims for near-zero emissions and sustainably resilient buildings by 2030.
“The decarbonization of the industry will also be led by new regulations in some jurisdictions. This is going to lead to more green certifications such as LEED and BREEAM. In this context, the use of sustainable and low-emitting building materials and sustainably harvested wood will become increasingly common and will help to reduce environmental impact,” predicted Eri Mitsostergiou, director at Savills World Research.
Lucrative luxury property segment
The Middle East and Africa’s ready-to-move-in luxury homes market witnessed substantial growth in 2023. Specifically, the region accounted for over 3 percent of global revenue, with a market size of $18.02 billion. And according to forecasts, it could further grow at a rate of 8.3 percent through 2030.
Dubai’s luxury real estate market is particularly robust, leading in high-value home sales. The city recorded an impressive 277 homes sold for $10 million or more in the first nine months of 2023, totaling $4.91 billion in transactions. The market’s expansion is driven by a rising demand for opulent residences, with individual buyers seeking personalized experiences.
Diversified real estate portfolio
When leading real estate portal Property Hunter asked industry experts about their top real estate trends for 2024, they highlighted increased diversification.
In the Middle East, Dubai and Abu Dhabi exemplify this trend best. During the second and third quarters of 2023, the UAE cities experienced rapid diversification in their real estate sectors. The said period saw the development of greener spaces, a rise in off-plan projects (where buyers purchase a house before it’s built) and a boost in ready property sales — all reflecting growing interest from international property seekers.
“I anticipate a more diversified real estate market. Many of the off-plan projects initiated in previous years will reach their handover stages,” noted Kika Pavese. She is a managing director at Abu Dhabi-based real estate agency, MD Real Estate.
“As a result, 2024 will see Abu Dhabi achieving a balanced real estate market where leasing, resale and off-plan sales will coexist harmoniously to cater to a wide spectrum of clients. Those who profitably sell their properties will have the opportunity to reinvest in the exceptional properties expected to enter the market in 2024,” she added.
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