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Abu Dhabi residential sector sees record growth in 2023: Sales jump by 83% YoY

2023 was a great year for the residential sector in Abu Dhabi with 11,200 units sold

Abu Dhabi residential sector sees record growth in 2023: Sales jump by 83% YoY

In 2023, the residential sector in Abu Dhabi experienced significant growth, with a total of 11,200 units sold, representing an 83% increase from the previous year. The surge in demand can be attributed to positive announcements throughout the year, with under-construction properties accounting for 75% of transactions. Developers responded to the strong market by launching over 8,000 new units to meet the growing demand. Improved market transparency also played a key role in attracting a wider range of investors and end-users, beyond the traditional investor segment. Additionally, foreign nationals increased their investments in the market, further fuelling the growth alongside sustained demand from the Emirati population.

Abu Dhabi has also benefited from a rise in the number of expats and digital nomads, as reflected in the Savills Executive Nomad Index, where the city made a new entry this year to claim 4th place.

The demand for high-end villas and townhouses in Abu Dhabi saw a steady increase in 2023, with 4,800 units sold, accounting for 43% of total transactions. Off-plan transactions were popular, making up 84% of all villa and townhouse sales. Saadiyat Island, Yas Island, and Al Reem Island were the most sought-after locations, with 51% of sales coming from these areas.

The average capital value for villas in the city increased by 6% y-o-y, reaching $3,211/sq m (AED 11,800 sq m), with some locations like Saadiyat Island and Yas Island seeing values as high as $4,352 sq m (AED 16,000 sq m). Additionally, the Abu Dhabi Housing Authority launched 1,700 units in the new Balghaiylam development near Yas Island, Savills latest research on the emirate’s residential sector showed.

Abu Dhabi has become far more outward-looking in the last two years and there is so much on offer now, including Yas Island, a huge leisure destination, and Saadiyat Island, where you have the Louvre and the Guggenheim, which is due to open in 2025,” mentions Stephen Forbes, Savills Head of Abu Dhabi.

Apartments remained the most popular property type, making up 57% of total transactions. Of this demand, 69% was for off-plan properties. Close to 3,400 apartment units were launched in the year, with over half of them being on Yas Island and Saadiyat Island. Yas Island’s family entertainment offerings have made it a sought-after location for residents.

In Saadiyat Island, Aldar Properties launched a total of 700 units across various projects including Nobu Residence, Manarat Living, and The Source. Al Reem Island saw limited new project launches, with only 256 units added through the Renad Tower project by Tiger Properties. Other notable project launches during the year included developments by Aldar Properties in Al Shamhka, Casares at Bloom Living by Bloom Properties, Marsa Al Jubail, Jubail Terraces at Jubail Island, and the Royal Park development at Masdar City by Reportage Real Estate.

The capital value of apartments in the city continued to rise, with an average growth of 6% y-o-y. The average capital value for apartments now stands at $4,021 sq m (AED 14,800 sq m), with some locations seeing growth as high as 18% y-o-y. Rental values, on the other hand, remained relatively stable, with less than 1% growth y-o-y.

“The non-oil sectors have seen significant expansion over the past two years, remained healthy, and are well positioned to grow over the next twelve months, affecting the real estate sector positively,” mentions Swapnil Pillai, Associate Director of Research at Savills Middle East. The industry has also profited from the government’s recent decision to remove the minimum down payment needed for applicants to qualify for a Golden Visa, since it will further encourage more people to become long-term city residents and encourage buyers to invest in real estate.