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Abu Dhabi property market continues strong growth

The Abu Dhabi property market continued its strong growth in the last quarter of 2023, with all segments showing a steady increase in value

Abu Dhabi property market continues strong growth

The ValuStrat Price Index for Abu Dhabi’s residential market has been on the rise, growing by 4.2% annually and 1% quarterly to reach 76.2 points from 100 points at the beginning of 2016. Apartments saw a slight increase in capital values over the past nine months, rising by 2.7% annually to reach 72.2 points. Villas, on the other hand, had a better performance, with a quarterly increase of 1.7% and an annual increase of 5.7%, reaching a total of 80.6 points.

The weighted average home value this quarter was approximately USD 243 per sq ft (AED 903 per sq ft), apartments stood at USD 263 per sq ft (AED 975 per sq ft), with villas at USD 196 per sq ft (AED 729 per sq ft). Saadiyat Island saw the highest annual capital gains this quarter, as villas rose 12.6%.

Villas in Al Raha saw growth of 5% YoY, and Mohammed Bin Zayed City was up 4.2% YoY. Hydra Village prices remained stable when compared to the previous year. Best performing apartments were located in Al Muneera Island (4.5%), Saadiyat Island (4.1%), and Al Bandar (4%). Al Reef saw little or no change in capital values in 12 months.

Citywide rent trend

The latest data shows that apartment asking rents have gone up by 5.3% annually and 1.3% quarterly. Among the apartment locations monitored, Al Reem and Al Muneera saw the highest rental growth on a quarterly basis, with increases of 4.4% and 4.1% respectively. Here are the average annual apartment asking rents: studios USD 13,500 (AED 50,000); 1 bed USD (19,980) AED 74,000, 2 beds USD 31,590 (AED 117,000), and 3 beds USD 44,820 (AED 166,000).

Citywide villa asking rents increased 7.5% YoY but with no significant change quarterly. On a quarterly basis, villa rents grew the highest in MBZ City (2.2%) and Saadiyat Island (1.5%). For villas, annual rents for 3 beds were USD 42,390 (AED 157,000), 4 beds USD 60,750 (AED 225,000) and 5 beds USD 82,080 (AED 304,000). The average occupancy rate among a sample of more than 48,000 homes in Abu Dhabi City stood at 80.7%.

Residential supply and sales

Abu Dhabi saw the completion of 2,587 apartments during the year, representing 42% of the expected residential pipeline for the whole of 2023. Scheduled project completions for 2024 include 6,808 residential units.

The average citywide residential price per square foot during the quarter was up 15.5% QoQ and 23.1% higher than the same period last year, mostly driven by the off-plan market. The average price for ready homes stood at USD 252 per sq ft (AED 937 per sq ft), increasing 1.6% QoQ and 6% YoY.

For off-plan properties, the average price stood at USD 409 per sq ft (AED 1,517 per sq ft) increasing by 18.1% from the previous quarter and 27.7% annually. Abu Dhabi off-plan transaction volumes, which represented 75.1% of overall sales, rose 23.6% QoQ, and 34.9% YoY. Whilst ready property sales grew 5% QoQ and 36.5% YoY. The number of mortgages registered was 1,649 with a total value of AED 4.2 billion during the quarter.