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Strong demand, ROI drive Abu Dhabi off-plan sales surge by 20%

Yas Island and Al Reem Island emerging as property hotspots, report shows

Published: Tue 22 Oct 2024, 8:03 PM

Updated: Tue 22 Oct 2024, 8:04 PM

By
Issac John

A view of skyscrapers on Reem Island in Abu Dhabi. The UAE capital city’s real estate market has thrived in Q3, areas like Yas Island and Al Reem Island have emerged as hotspots. — File photo

Strong demand and attractive returns have driven the total sales value of off-plan projects in Abu Dhabi as the third quarter recorded a 20 per cent uptick compared to the previous quarter, with Yas Island and Al Reem Island emerging as property hotspots.

A steep jump in Q3 sales value to Dh5.4 billion from Dh4.5 billion in Q2 reflects the sustained strong demand and impressive returns of the emirate’s buoyant property sector, in particular the luxury segment that showed a significant surge in prices and rents. The affordable segment also sustained the trend in the 3rd quarter with sales and rental prices increasing in certain areas, according to data made available by real estate consultants.

Outpacing previous quarters, as the UAE capital city’s real estate market has thrived in Q3, areas like Yas Island and Al Reem Island have emerged as hotspots, showing strong demand and impressive returns, says Haider Ali Khan, CEO of Bayut & dubizzle and CEO of dubizzle Group Mena. “This growth demonstrates confidence in the market, which will drive its continued upward momentum. The capital city’s economic stability and premier urban experience, along with landmark projects like the upcoming Jubail Islands, continue to attract,” said Khan.

Real estate experts said the overall trends reflect the confidence of stakeholders in the market. “Investment-friendly policies, transparency in transactions, digitalisation of processes and investment security have remained significant factors cementing this confidence.”

In the luxury villa category, Yas Island remained the top choice for buyers and tenants seeking luxury villas while Al Reem Island was a favourite for both buying and renting luxury apartments in the 3rd quarter. In Yas Island, villas recorded an average sales price of Dh 4.25 million and an average rent of Dh226,000 during the quarter. Prices and rents for Al Reem Island luxury apartments averaged at Dh1.39 million and Dh99,000 respectively.

Al Jubail Island has provided the highest investment return of 6.82 per cent for luxury villas, while Al Reem Island led the luxury apartment market with an estimated ROI of 6.85 per cent, Bayut & dubizzle data shows.

Al Reef has been the leading affordable area for villas, with an average sales price of Dh2.16 million. For rentals, Mohammed Bin Zayed City has remained a preferred choice, offering villas at an average rent of Dh144,000. Al Reef has also recorded the highest ROI of 8.90 per cent in the affordable apartment market, while Al Ghadeer has led the affordable villa segment with an ROI of 6.29 per cent.

For the top affordable area for apartments, Al Reef has remained the most sought-after with an average sales price of Dh857,000. For affordable rental apartments, Khalifa City has topped the list with an annual rent of Dh44,000.

According to the market research data, the Royal Park in Masdar City emerged as the most popular affordable off-plan apartment project, with an average sales price of Dh883,000. For affordable villas, Al Reeman 2 in Al Shamkha remained the most searched project with prices averaging Dh4.05 million. For luxury off-plan projects, the City of Lights in Al Reem Island has led the list with an average price of Dh1.41 million. While Noya Viva in Yas Island has taken the lead in the luxury villa segment with an average price of Dh3.37 million.