According to Bayut, a top real estate portal in the United Arab Emirates, the third quarter (Q3) of 24 saw an increase in investment and a high return on investment in Abu Dhabi’s real estate market.
According to Bayut’s Q3 market report for Abu Dhabi, search trends indicate that the capital’s luxury and affordable markets are performing well.
Trends for buying properties
Al Reef, Al Ghadeer, and Masdar City were the top destinations for people wishing to buy reasonably priced apartments in Abu Dhabi in Q3 2024. Yas Island, Al Raha Beach, and Al Reem Island continue to be well-liked choices for individuals looking to purchase upscale apartments.
In terms of affordability, the most interest from investors has been shown in villas for sale in Al Reef, Khalifa City, and Al Shamkha. With Yas Island, Al Raha Gardens, and Saadiyat Island leading the way, the market for luxury villas has continued to draw purchasers.
According to data from Bayut, the average cost per square foot of reasonably priced apartments has mostly increased by a little more than 2%.
Price increases of up to 8% have been primarily driven by the ongoing demand for luxury apartments, especially in desirable areas. Saadiyat Island apartments have seen the largest price increase on record.
A steady price increase of up to 6% has been observed in the sales market for reasonably priced villas. As more buyers entered this market segment looking for roomy, reasonably priced homes, the average price per square foot of Khalifa City villas increased by as much as 5.65%.
The average cost per square foot of luxury villas has been steadily increasing, reaching 5% in the third quarter of 2024. Luxurious villas on Yas Island, which enjoy proximity to attractions like Ferrari World, Yas Marina Circuit, and SeaWorld Abu Dhabi, experienced the largest increase in average price per square foot, at 4.94%.
ROI trends for properties for sale
At 8.86% and 8.20%, respectively, Al Reef and Al Ghadeer reported the highest yields for reasonably priced apartments.
HNWIs and investors should be aware that premium properties on Yas Island and Al Reem Island have seen returns of up to 7.22% and 6.99% for luxury apartments, respectively. Villas in Hydra Village produced appealing yields of 8.06% in the budget-friendly market. Conversely, Abu Dhabi Gate City’s reasonably priced villas provided returns of 6.69%.
With an ROI of 6.50%, Yas Island was the most sought-after site for luxury villas, closely followed by Al Raha Gardens, which provided an ROI of 6.42%.
Popular off-plan projects
Abu Dhabi’s off-plan real estate market is still thriving, with several projects appealing to both luxury and affordable homebuyers and investors.
In the third quarter of 2024, the following projects were the most popular choices:
Apartments
Affordable Segment: With a mix of contemporary living at competitive costs, Royal Park in Masdar City has emerged as one of the most sought-after choices for purchasers of affordable apartments. First-time buyers and investors looking for long-term value find it very appealing due to its advantageous location and flexible payment plans, which give them confidence in their investment choices.
Luxury Segment: With its combination of cutting-edge architecture, waterfront views, and upscale amenities, City of Lights on Al Reem Island continues to be the preferred choice for buyers of luxury apartments. Investors looking for a luxurious and lucrative investment experience are drawn to its prime location and opulent lifestyle.
Villas
Affordable Segment: Bloom Living has attracted a lot of search traffic in the market for reasonably priced villas, possibly as a result of its family-friendly setting, generous green areas, and variety of villa sizes that meet the needs of various purchasers. The community-focused design of the development is still generating a lot of interest.
Luxury Segment: With its stunning scenery, upscale waterfront homes, and proximity to historical sites, Saadiyat Lagoons on Saadiyat Island is the project of choice for buyers of luxury villas. Those looking for an opulent and tranquil lifestyle are still drawn to this esteemed development.
Trends for renting properties
The third quarter of 2024 has seen significant changes in rental trends in the Abu Dhabi residential real estate market, affecting both the luxury and affordable rental segments.
Apartments
Affordable Segment: According to Bayut’s analysis of the Abu Dhabi rental market, in Q3 2024, tenants’ interest in reasonably priced apartments was primarily concentrated in Khalifa City, Al Khalidiya, and Al Shamkha. Rental prices increased by up to 15% in popular districts, but after a spike in demand, the most noticeable price changes were seen in one- and two-bedroom apartments in Al Khalidiya and two-bedroom units in the Tourist Club area.
Luxury Segment: The available inventory in Al Raha Beach, Al Reem Island, and the Corniche Area has drawn the majority of tenants looking for luxury apartments. Luxurious apartment rents in Abu Dhabi’s most sought-after neighborhoods have typically gone up by 2% to 11%, with Saadiyat Island’s one- and two-bedroom apartments seeing the most notable price increases.
Villas
Affordable Segment: Tenants have indicated a preference for neighborhoods such as Mohammed Bin Zayed City, Khalifa City, and Madinat Al Riyadh when looking for reasonably priced villas in the UAE capital. Budget villa rentals in well-known neighborhoods have seen price increases of less than 5%, with some properties in Khalifa City, Madinat Al Riyadh, Shakhbout City, and Al Reef reporting price reductions of up to 9%.
Luxury Segment: Yas Island, Al Raha Gardens, and Al Mushrif have seen a surge in search volume from tenants who are interested in luxury villas. Rental prices for upscale homes have dropped by as much as 8% overall. The cost of renting six-bedroom apartments in Al Karamah saw the biggest price drop. The 6-bedroom villas in Al Mushrif, on the other hand, have seen a 12.4% increase, indicating increased demand from wealthy people and investors seeking out upscale, roomy homes.
Abu Dhabi’s residential real estate market is still thriving and doesn’t appear to be slowing down as 2024 approaches its last quarter. The future looks promising for both homeowners and investors due to the combination of sustained government assistance, ongoing infrastructure development, and a consistent flow of foreign investment.
Increased transparency
Commenting on the findings, Haider Ali Khan, CEO of Bayut and Head of Dubizzle Group Mena, said: “The Abu Dhabi real estate market is continuing to stay strong this year, thanks to increased transparency and solid investments from both local and international players. If we look at just the last quarter, we have had over 3.5 million visits on our platform for listings in Abu Dhabi, showing just how strong the demand for properties in the capital is even during summer months.
“The government’s efforts to enhance data accessibility and push forward digital initiatives, like AI-powered services and the comprehensive DARI real estate platform, have definitely contributed to this. Looking to the future, we can anticipate even better outcomes. The Abu Dhabi Real Estate Centre (ADREC) is set to attract more foreign investments by streamlining regulations and maintaining a strong focus on transparency. By embracing global standards and leveraging trends like smart city projects and sustainability, Abu Dhabi is positioned for even more growth in its real estate sector.”
