ABU DHABI REAL ESTATE MARKET SEES STRONG GROWTH IN THIRD QUARTER

Abu Dhabi's real estate market continued to experience strong growth throughout the third quarter of 2024, showcasing a surge in both the luxury and affordable property segments. According to the latest data released by Bayut.com, a prominent property portal, the market witnessed steady price appreciation, particularly in the luxury villa segment, where prices per square foot climbed by up to 5 per cent.

Growth in Luxury Villas

Luxury villas in Abu Dhabi, especially those located on Yas Island, led the charge in price appreciation. Yas Island saw the highest jump, with a 4.94 per cent increase in the average price per square foot. This prime location is known for its close proximity to popular attractions such as SeaWorld Abu Dhabi, Yas Marina Circuit, and Ferrari World. The area has become a hotspot for buyers looking for a high-end lifestyle combined with easy access to leisure activities.

The sustained demand for luxury properties has not been limited to villas. The luxury apartment market in prime locations such as Saadiyat Island has seen price hikes of up to 8 per cent, with Saadiyat Island registering the highest increase. With these developments, the luxury real estate market in Abu Dhabi is becoming increasingly competitive, attracting high-net-worth individuals looking for exclusive, upscale homes.

Steady Growth in Affordable Segments

While luxury properties have garnered significant attention, the affordable housing segment has also shown steady growth. Affordable villas in areas like Khalifa City have experienced a price increase of up to 5.65 per cent. Buyers seeking spacious yet affordable homes have turned their attention to developments in Al Reef, Al Ghadeer, and Masdar City, where affordable apartment prices have risen by over 2 per cent.

These locations have become popular among buyers due to their combination of competitive pricing and community-oriented living. Al Reef, in particular, has emerged as a leading choice for those interested in affordable villas, thanks to its family-friendly environment, while Al Ghadeer and Masdar City have remained top picks for those looking for affordable apartments.

Rising Rental Yields and Popularity of Prime Locations

The Abu Dhabi real estate market's performance during Q3 2024 has not only attracted homebuyers but also appealed to investors, particularly those looking for high rental yields. Al Reef and Al Ghadeer have reported the highest yields for affordable apartments, offering returns of 8.86 per cent and 8.20 per cent, respectively. In the luxury segment, Yas Island and Al Reem Island have also delivered robust returns for investors, with luxury apartments yielding up to 7.22 per cent and 6.99 per cent in these prestigious locations.

On the villa front, Yas Island continues to stand out as the most desirable location for luxury villa buyers and investors. Villas here offer an impressive ROI of 6.50 per cent, closely followed by Al Raha Gardens, which boasts a return of 6.42 per cent. The growing interest in these areas underscores the demand for luxury living spaces with top-tier amenities and proximity to some of Abu Dhabi's most popular attractions.

The Rise of Off-Plan Projects

Abu Dhabi’s off-plan property market is thriving, with several new projects gaining the attention of both investors and homebuyers. In the affordable apartment segment, Royal Park in Masdar City has emerged as one of the most searched-for developments. Its combination of modern design, strategic location, and attractive payment plans has made it a popular option for first-time buyers and long-term investors seeking value-driven investments.

In the luxury apartment segment, the City of Lights in Al Reem Island continues to dominate interest. With its state-of-the-art architecture, waterfront views, and upscale amenities, this development appeals to those seeking a luxurious urban lifestyle. The project’s premium location and lavish living experience have solidified its status as a prime choice for luxury apartment buyers.

For villas, Bloom Living has garnered attention in the affordable segment. This development offers a range of villa sizes catering to diverse buyer needs and is known for its green spaces and family-friendly atmosphere. On the luxury side, Saadiyat Lagoons on Saadiyat Island has become the standout project, offering exclusive waterfront villas set amidst breathtaking landscapes. The proximity to cultural landmarks and the serene environment make this development a magnet for those seeking a luxurious, peaceful lifestyle.

Shifts in the Rental Market

The rental market in Abu Dhabi has experienced noticeable shifts in both the affordable and luxury segments during the third quarter of 2024. Affordable apartments in areas like Khalifa City, Al Khalidiya, and Al Shamkha have seen increased tenant interest. One and two-bedroom apartments in Al Khalidiya and the Tourist Club area reported the most significant price movements, with rental costs in popular districts recording upticks of up to 15 per cent.

In the luxury apartment segment, tenants have gravitated towards Al Reem Island, Al Raha Beach, and the Corniche Area, where rents have generally increased between 2 per cent and 11 per cent. The most notable increases were reported for one and two-bedroom apartments in Saadiyat Island, reflecting the sustained demand for upscale living spaces in prime locations.

For affordable villas, areas like Mohammed Bin Zayed City, Khalifa City, and Madinat Al Riyadh have emerged as top choices for tenants. Rental costs for budget villas have increased by under 5 per cent in these locations. On the other hand, certain units in Khalifa City, Madinat Al Riyadh, and Shakhbout City reported price decreases of up to 9 per cent, offering tenants more competitive rental options.

The luxury villa market has shown mixed trends. While most upscale houses have seen a decrease in rental costs of up to 8 per cent, some, like the six-bedroom villas in Al Mushrif, have reported a notable increase of 12.4 per cent, suggesting growing interest from high-net-worth individuals.

Outlook for Abu Dhabi’s Real Estate Market

As 2024 draws to a close, the outlook for Abu Dhabi’s residential property market remains bright. The combination of government support, continuous infrastructure development, and strong foreign investment is expected to fuel further growth. With increased transparency and a focus on digital initiatives, such as AI-powered services and the DARI real estate platform, Abu Dhabi is positioning itself as a global leader in real estate.

The market is expected to benefit from ongoing efforts to streamline regulations and embrace global standards, particularly in smart city projects and sustainability. With these developments, Abu Dhabi’s real estate sector is well-positioned for even more significant growth in the years ahead.