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Abu Dhabi property market on solid growth track due to higher demand

Luxury neighbourhood prices up 13% in 2023

Sales prices for luxury apartments and villas in Abu Dhabi’s sought-after neighbourhoods have risen by up to 13 per cent in 2023, new data shows.

Based on the search trends observed on Bayut.com, the UAE’s leading property portal, the prices of properties in Abu Dhabi have been on an upward trend, which could be advantageous for those looking to sell or rent out their properties. While there was an increase in sales prices in several areas driven by high demand, this trend was particularly noticeable in upscale neighbourhoods offering high-end amenities and facilities.

Bayut recently released its Abu Dhabi Annual Sales and Rental Market Report for 2023, providing a comprehensive analysis of the real estate market in the UAE capital.

With these comprehensive reports, Bayut reveals key insights into the current market trends, pricing dynamics and future forecasts in the sales and rental market of Abu Dhabi.

For affordable apartments, Al Reef and Al Ghadeer have been the most searched areas. Luxury apartment seekers have also generated high search volumes for units in Al Reem Island, Yas Island and Saadiyat Island in 2023.

Data from Bayut shows that s. Saadiyat Island was a particular highlight, revealing price increases of 8.73 per cent for luxury apartments and a massive 12.9 per cent hike for premium villas.

Sales price-per-square-foot for the highly searched areas featuring affordable apartments have experienced moderate declines of up to 2.05 per cent. When it comes to affordable villas, there has been a minor increase of up to 3.95 per cent recorded in price-per-square-foot. Most notable appreciations were seen for Al Samha, followed by Khalifa City and Al Ghadeer.

As per DARI, Abu Dhabi’s digital real estate ecosystem, there were over 14,000 residential property (ready and off-plan) sales transactions valued at over Dh52 billion in 2023.

In terms of projected ROI for apartments, Al Reef stood out with an impressive 8.04 per cent rental yield in the affordable housing category. Al Reem Island continued to offer a healthy 6.65 per cent ROI for investors interested in luxury flats for sale in Abu Dhabi.

Bayut’s data analysis for return on investment (ROI) in Abu Dhabi’s popular villa communities also reveals positive stats. In the affordable category, Hydra Village offered a 6.78 per cent ROI for houses, whereas Al Raha Gardens offered the highest ROI of 6.04 per cent for buy-to-let villas in the luxury villas segment.

Advertised rental prices for apartments in the most searched-for luxury areas have experienced moderate to major increases by up to 14 per cent, mainly in island communities. Affordable apartment rentals have continued to stay competitive, with a price drop of almost 3 per cent in some areas.

Rental prices for affordable villas have experienced minor to moderate upticks of up to 4.91 per cent. High-end villas, on the other hand, witnessed major appreciations in rental costs. As per Bayut’s report, Yas Island and Saadiyat Island have revealed 12.7 per cent and 22.2 per cent hikes in prices for luxury houses, potentially driven by a solid demand.

Haider Ali Khan, CEO of Bayut and Head of Dubizzle Group Mena said: “What we witnessed in 2023 was a record-breaking year for the overall UAE real estate market and Abu Dhabi has also been a major contributor to that success. Local and international HNWIs continue their interest in UAE real estate as a prime market for investment, especially with landmark projects like Jubail Islands and Rahman Islands taking shape.

While the factors for the growth in the property sales market in Abu Dhabi certainly include investors taking advantage of favourable market conditions, the steady increases across the capital’s rental sector have also inspired more property-seekers to become homeowners, as opposed to paying large sums in rent.