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Prices in Abu Dhabi’s property market are still on the rise: Property prices in Abu Dhabi rose between 2 and 21% in 1H 2024, as compared to 2H 2023, with the biggest increases hitting luxury units amid rising demand, according to data (pdf) by Bayut. Rentals also rose, particularly for apartments in luxury neighborhoods.
Luxury villas led the pack: The average advertised price-per-sq-ft for luxury villas in Abu Dhabi rose by up to 10% during the six-month period, with prices for luxury houses in Yas Island appreciating by 10.3%. For luxury apartments, Saadiyat Island recorded the highest appreciation at 6%, while premium flats in Yas Island and Al Reem Island logged price increases of nearly 2.8%.
Affordable housing was not spared: The advertised sales price-per-sq-ft in the affordable segment also “generally increased,” Bayut notes, adding that apartments in Al Ghadeer recorded a significant increase of 9.5% in 1H 2024, followed by affordable flats in Al Reef, which witnessed a modest rise of 2.2%. Budget-friendly villas in the emirate saw increases of up to 7%, with villas in Khalifa City as the exception, with a 1.7% price drop.
On the rentals side: Rental rates for apartments in popular luxury neighborhoods saw “significant growth” of up to 21%, especially in the Saadiyat Island and Al Raha Beach communities. Affordable apartment rentals appreciated by more than 7% in some areas — such as Al Muroor — on the back of strong demand.
Rental rates for affordable villas saw a “minor to moderate increase” of nearly 7%, except for Shakhbout City, which recorded a minor decline. Upscale villas recorded rent hikes of up to 12% in 1H 2024, particularly in Al Bateen.
Increases are thanks to off-plan projects + more regulatory transparency: Price hikes across both the affordable and luxury segments were driven by a “diverse range of off-plan projects currently available in Abu Dhabi,” Bayut CEO Haider Ali Khan said. “With the government proactively bringing in more regulation and transparency, we can expect the properties in the capital to continue drawing both local and international interest.”
Biggest buck for investing: Affordable apartments in Al Ghadeer emerged as a “lucrative investment option in the budget-friendly category,” offering a high projected return on investment (ROI) of 8.5%, according to Bayut’s data. Al Reem Island maintained its popularity for luxury apartment purchases with a projected rental yield of 6.9%. For villas, Hydra Village offered the highest ROI of 8.1% for affordable houses, while Yas Island luxury villas had an ROI of 6.9%.
AJMAN-
The property market in Ajman also grew 33% y-o-y in 1H 2024 to log some 7k transactions valued at over AED 9 bn, according to a statement from the Ajman Government Media Office. More than half of that — 57% — came from foreign investors, who poured some AED 6.05 bn into real estate in the emirate. The increase was attributed to a successful Ajman Real Estate Investment Exhibition, which attracted AED 195.8 mn investments, as well as a flexible regulatory environment and a diversity of real estate projects.
Sales made up 77% of transactions with a total of AED 6.14 bn transactions, an increase of 37% y-o-y, while mortgages worth AED 1.8 bn made up the rest.
OTHER REAL ESTATE NEWS-
Industrial and logistics demand in Dubai rose 185% y-o-y in 1H 2024, logging almost 18 mn sqft of new requirements for industrial and logistics assets in the emirate, according to a report by global property consultant Knight Frank picked up by Construction Business News. The emirate saw increased interest from institutional investors from the US, China, and Europe, driven by globally attractive sector yields of around 8.3%.
Biggest sectors: The manufacturing and construction sectors comprised 11.7% and 11.1% of demand, followed by logistics, which made up 10.2%.
Rentals edged up: Jebel Ali Industrial (Grade B) logged the highest rental growth during the period at 38.5%, reaching AED 36 per sqft.
A shortage of new warehouses in Dubai sent demand spilling over to Abu Dhabi and Al Ain, with Abu Dhabi’s Kezad Group — representing 55% of UAE’s industrial supply — recording 88% occupancy in 1Q 2024. The warehouse also witnessed longer lease commitments, with the average lease length increasing to almost six years from four years in 2022.
More supply coming? Some 660k sqft of new supply is expected in Dubai in 2024, with an additional 1.3 mn sqft slated for handover in 2025.
