Abu Dhabi Real Estate Records Price Boom

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by Ashas Bukhari

Abu Dhabi Real Estate Records Price Boom

3 May 2024

Despite recent challenges, the Abu Dhabi real estate market has shown strong growth in the first quarter, with investors from around the globe continuing to show interest in the UAE's capital city.

According to Bayut, a prominent property portal, upscale neighbourhoods have seen a significant rise in sales prices, with luxury apartments and villas experiencing up to a 6 per cent increase. In particular, areas like Saadiyat Island have also experienced moderate price increases, with luxury apartments rising by 3.64 per cent and premium villas by 5.53 per cent during this time period.

According to Bayut’s data analysis for the first quarter, the Abu Dhabi real estate market is on a steady upward trajectory. The increase in property prices, number of transactions, and overall transaction value demonstrates the market's strong and stable performance. These patterns are expected to continue in the following quarters, cementing Abu Dhabi's reputation as an appealing location for real estate investments. Though prospective buyers looking for houses for sale in Abu Dhabi will face increased prices, they can find consolation in the fact that buying property in Abu Dhabi will be well worth the investment. The return on investment (ROI) is projected to increase in the near and far future.

Which areas are seeing the biggest price hikes?

A careful examination of market trends and price patterns in the Abu Dhabi real estate and rental markets for the first quarter has revealed that there has been a slight decrease in the average sales price-per-square-foot for affordable apartments and villas, with a maximum decline of 4.0 per cent. However, during this same time period, Al Ghadeer experienced an increase in prices, with apartments rising by 6.02 per cent and budget-friendly villas by 5.19 per cent.

Al Reef and Al Ghadeer: top homebuying choices

The most popular areas for inexpensive apartments are Al Reef and Al Ghadeer. In the first quarter of 2024, there was a high demand for luxurious apartments in Al Reem Island and Al Raha Beach. Al Reef and Khalifa City have been the top choices for those interested in purchasing villas within a budget. On the other hand, those seeking luxury buy-to-let villas in Abu Dhabi have shown interest in Yas Island and Saadiyat Island.

Al Reef has become a popular choice for investors due to its affordable apartments and projected return on investment of 8.30%. On the other hand, Al Reem Island offers a strong rental yield of 6.9% for those interested in luxury apartments in Abu Dhabi. For affordable housing options, Al Ghadeer boasts the highest ROI at 7.65%, while Yas Island offers the best ROI at 6.91% for luxury villas.

Other affordable options to consider when buying property in Abu Dhabi, especially for those looking for budget-friendly housing options, include Khalifa City and Al Khalidiyah. These two locations have emerged as popular areas in Abu Dhabi where apartments for sale have been found. Meanwhile, Mohammed Bin Zayed City and Khalifa City continue to be top choices for affordable villas in the rental market. Meanwhile, when it comes to affordable off-plan apartments for sale in Abu Dhabi, two options stand out above the rest: Royal Park and Bloom Living. Both these areas are popular among people looking to buy property in the nation’s capital.

Fay Al Reeman 2 is another popular option for affordable off-plan houses.

Source: aldar.com

And the winners in the luxury segment are…

The demand for luxurious properties has been on the rise, with prospective buyers showing interest in island communities such as Yas Beach Residences and Saadiyat Cultural District. According to a Bayut search trends analysis, off-plan villa projects like Yas Acres and Murjan Al Saadiyat have been the top choices among buyers.

When it comes to apartments for sale in Abu Dhabi, Al Reem Island and Al Raha Beach have been the most preferred locations among luxury property seekers. At the same time, Al Raha Gardens and Yas Island have been the number one picks for high-end villas for sale in Abu Dhabi.

Source: yasbeachresidence.com

Rental rates for luxurious apartments have seen significant growth of up to 9.0%, particularly in sought-after areas such as Saadiyat Island and Al Raha Beach. On the other hand, affordable apartments in areas like Al Muroor and Al Khalidiyah have witnessed a rental price increase of approximately 7.0%.

The rental rates for affordable villas have seen a moderate increase of about 5.0 per cent. However, in the neighbourhood of Madinat Al Riyadh, rents have gone up by a significant 12.9 per cent, with landlords listing properties at higher prices. On the other hand, luxury villas have also experienced a minor to moderate surge in rental prices. In Al Bateen, there has been a considerable increase of 8.15 per cent in luxury home rentals, possibly due to high demand in the market.

The future looks bright for Abu Dhabi’s real estate market

According to DARI, Abu Dhabi's reputable digital real estate system, the first quarter of 2024 saw a significant increase in residential property sales transactions, totalling over 4,674 with a value of Dh9.6 billion. This demonstrates the strong performance of the market and reflects investors' trust in the city's real estate industry. These numbers encompass both ready properties (1,167) and off-plan units (1,752).

The Abu Dhabi real estate market continues to thrive and build upon its strong performance in 2023. Current trends show a growing sense of confidence among both local and international high-net-worth individuals that the Abu Dhabi real estate market is full of potential and a top choice for investment. Looking ahead, the completion of mega-projects like the Jubail Islands and Ramhan Islands will bring even more opportunities for growth in the capital's flourishing property sector. Exciting times are on the horizon for this market.

by Ashas Bukhari