The Abu Dhabi real estate market witnessed significant rises in sales prices and rental rates across both affordable and luxury sectors during the first half of 2024, according to a new report by Bayut.
In the luxury villa market, residential island communities have experienced considerable price increases. Yas Island stood out with a 10.3 percent rise in prices for luxury homes, driven by heightened demand for high-end properties in the area.
Other luxury villa locations also saw considerable growth, with prices climbing by up to 10 percent in popular regions.
“Over the past six months, we’ve observed the Abu Dhabi real estate market grow, stabilise, and then grow once more. Recent industry reports from the Abu Dhabi Real Estate Centre (ADREC) confirm that foreign direct investment in the capital is at an all-time high, solidifying the emirate’s position as a major player in global property markets over the last 18-24 months,” stated Haider Ali Khan, CEO of Bayut and CEO of Dubizzle Group MENA.
Luxury demand drives capital growth
The luxury apartment sector has demonstrated similar strength. Saadiyat Island recorded the highest appreciation at 6 percent, reinforcing its status as a prime location for high-end flats.
Premium apartments on Yas Island and Al Reem Island also saw price increases of 2.77 percent and 2.75 percent, respectively, further indicating robust demand for luxury properties in the capital.
In the affordable sector, the market has shown resilience and growth. Apartments in Al Ghadeer saw a notable rise of 9.5 percent in advertised sales price-per-square-foot, while affordable flats in Al Reef experienced a modest increase of 2.16 percent.
This trend reflects a growing interest in more budget-friendly options among buyers and investors.
Notable price movements in villas
The villa market in the affordable segment has also seen positive movement. Average sales prices per square foot for budget-friendly villas rose by up to 7 percent in the first half of 2024.
Notably, villas in Al Ghadeer and Al Samha experienced substantial increases of 6.10 percent and 5.57 percent, respectively.
However, villas in Khalifa City deviated from this trend, with a slight price decrease of 1.73 percent.
The report also highlighted several areas offering attractive returns on investment (ROI). In the affordable category, apartments in Al Ghadeer emerged as a lucrative option with a high projected ROI of 8.52 percent.
For those interested in the luxury segment, Al Reem Island remained popular for apartment purchases, offering a strong projected rental yield of 6.94 percent during the first half of 2024.
In the villa segment, Hydra Village stood out by providing the highest ROI of 8.08 percent for affordable houses.
For luxury villa investments, Yas Island properties demonstrated an impressive ROI of 6.89 percent, further establishing the island’s status as a prime location for high-end real estate.
Off-plan developments attract interest
The report also highlighted popular off-plan projects. In the affordable apartment category, Royal Park and Bloom Living were the top choices for budget-conscious investors.
For luxury buyers, off-plan developments in island communities such as Yas Bay, City of Lights, and Saadiyat Cultural District attracted significant interest.
In the villa sector, Fay Al Reeman 2 was preferred by small-scale investors for affordable options. For luxury off-plan villas, Yas Acres and Murjan Al Saadiyat remained popular choices among buyers.
Rental property market in Abu Dhabi
Bayut’s analysis revealed a dynamic and resilient rental property market in Abu Dhabi. In the affordable sector, Khalifa City and Al Khalidiyah have been prominent choices for apartment rentals, while Mohammed Bin Zayed City (MBZ City) and Khalifa City emerged as the top searched areas for renting affordable villas.
For luxury rentals, Al Reem Island and Al Raha Beach were the preferred locations for apartments.
Yas Island and Al Raha Gardens led the rental market for high-end villas, reflecting the continued appeal of these areas to affluent tenants.
The luxury apartment rental market has experienced remarkable growth, with prices rising by up to 21 percent in popular areas such as Saadiyat Island and Al Raha Beach.
This significant increase indicates strong demand for high-end rental properties in these sought-after locations.
In the affordable segment, apartment rentals have also appreciated, with increases of over 7 percent in areas such as Al Muroor. This trend suggests growing demand for more budget-friendly rental options in the capital.
The villa rental market has shown varied trends. Affordable villa rentals have seen increases of nearly 7 percent in most areas, although Shakhbout City was an exception, recording a slight decline.
“The diverse range of off-plan projects currently available in Abu Dhabi has significantly contributed to this heightened interest from international high-net-worth individuals (HNWIs) and investors, particularly in the luxury sector. With the government proactively introducing more regulation and transparency, we can expect properties in the capital to continue attracting both local and international interest. Demand has also remained high on Bayut throughout 2024, with traffic increasing steadily month by month, and we anticipate this trend to continue into the second half of the year,” Khan added.
