Abu Dhabi Real Estate Market Booms Attracting International Investors
Abu Dhabi’s real estate market experiences unprecedented growth, drawing international investors.
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Prices for affordable apartment rentals increased by nearly 7% in specific areas, reflecting ongoing demand for rental properties throughout the emirate.
Bayut‘s latest detailed market analysis highlights significant growth in Abu Dhabi’s real estate, fueled by rising interest from both local and international investors.
Key trends in Abu Dhabi real estate:
- Al Reef and Al Ghadeer are preferred locations for budget-friendly apartments.
- Al Reem Island and Al Raha Beach are top picks for luxury apartment seekers.
- Al Reef and Khalifa City are increasingly popular for budget villas.
- Yas Island and Saadiyat Island are leading areas for luxury buy-to-let villas.
The data from UAE’s largest real estate portal, Bayut, shows that sales prices for luxury apartments and villas in popular areas rose by up to 6% in the first quarter of 2024.
Saadiyat Island saw moderate price increases, with luxury apartments and premium villas appreciating by 3.64% and 5.53%, respectively.
Despite a slight drop in the price-per-square-foot for budget-friendly apartments and villas, Al Ghadeer recorded a price increase of 6.02% for apartments and 5.19% for budget-friendly villas.
High transaction volumes signal
DARI, Abu Dhabi’s digital real estate platform, recorded over 4,674 residential property sales transactions valued at more than AED 9.6 billion in Q1 2024, covering both ready properties and off-plan units.
Affordable apartments in Al Reef are becoming attractive investment options with a high projected ROI of 8.30%. Likewise, luxury apartments in Al Reem Island continue to draw investors with a projected rental yield of 6.90%.
Al Ghadeer offers the highest ROI of 7.65 percent for affordable houses, while Yas Island boasts the highest ROI of 6.91 percent for luxury villas.
Growth in the rental market
Khalifa City and Al Khalidiyah are favored for affordable apartment rentals, while Mohammed Bin Zayed City (MBZ City) and Khalifa City are leaders in affordable villa rentals.
Luxury rentals are concentrated in Al Reem Island and Al Raha Beach for apartments, and Al Raha Gardens and Yas Island for premium villas.
Rental rates for apartments in upscale areas increased by up to 9% in places like Saadiyat Island and Al Raha Beach.
Abu Dhabi’s real estate market continues its strong performance from 2023 into the first quarter of 2024.
“Abu Dhabi’s real estate market has carried the momentum of its strong 2023 performance into the first quarter of 2024. When we look at the current market trends, it’s quite clear that there is increasing confidence among both local and international HNWIs that Abu Dhabi real estate is abundant with opportunity and is a prime market for investment. Looking to the future, with mega-projects projects such as Jubail Islands and Ramhan Islands coming to fruition, it’s fair to say that exciting times lie ahead for the capital’s thriving property sector,” said Haider Ali Khan, CEO of Bayut and CEO of Dubizzle Group MENA.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
Villa prices saw particularly strong growth, with capital values increasing by 33.4 percent year-on-year
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Dubai’s real estate market showed strong performance in the second quarter of 2024, with notable increases across the residential, office, and retail sectors, according to a new ValuStrat real estate report for Q2 2024.
Villa prices experienced particularly strong growth, with capital values rising by 33.4 percent year-on-year.
Haider Tuaima, Director and Head of Real Estate Research at ValuStrat said: “The Dubai real estate market has shown impressive growth and resilience in recent months. The ValuStrat Price Index for Residential Capital Values increased by 6.4 percent quarterly and 28.2 percent annually, reaching 178.2 points.
“Despite severe flooding caused by record rainfalls in April, the quick and effective response from developers and authorities helped to control the damage, ensuring that market activity and property valuations remained robust in the subsequent months.”
The office sector also performed well, with the VPI for office capital values surging by 31.7 percent annually and 9.4 percent quarterly, reaching 212.5 points—the highest quarterly increase in a decade.
In the retail sector, Emaar Properties reported 98 percent occupancy in their prime mall assets, while overall mall occupancy stood at 96 percent during the first quarter of 2024. The hospitality sector also saw growth, with total international guests reaching 8.12 million as of May 2024, a 9.9 percent increase compared to the same period last year. Hotel occupancy reached 81 percent, rising by 1.4 percent year-on-year.
Despite these positive indicators, Tuaima added, “The decline in transaction volumes calls for a closer examination of market dynamics as stakeholders navigate this evolving landscape.”
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
