In the first quarter of 2023, residential values across Abu Dhabi’s freehold areas grew by 1.2%, pushing the average prices to AED 964 per square feet.
In contrast, villa values showed signs of moderation after rising for six consecutive months, resulting in an annual rate of change of 1.2%, according to the latest Abu Dhabi Residential Market Review by global property consultancy, Knight Frank.
According to the Department for Municipalities and Transport, Yas Island recorded a staggering AED 4.2 billion in property transactions during 2022, followed closely by Al Reem Island at AED 3.4 billion, and Saadiyat Island at AED 3.1 billion. The total value of transactions across the city rose by 8.5% in 2022, and the number of deals saw an increase of more than 27%.
The stability in prices across Abu Dhabi’s freehold areas is largely due to a limited number of new homes currently under construction. Knight Frank estimates that 29,000 homes are set to be completed by the end of 2025, with villas making up 58% of this number. However, the pace of new project launches is quickening, with 15 new residential projects unveiled in the first quarter of 2023 alone. At present, 5,600 homes have been announced, but construction is yet to commence on these.
Stephen Flanagan – Partner, Head of Valuation and Advisory MENA comments, “We are observing a significant upswing in new project launches. With the city’s strong economic growth driving job creation, we expect an upturn in demand for rental properties, particularly in the villa market. Like the sales market, tenants are seizing the opportunity to upgrade their accommodation wherever possible, which is leading to a strengthening of the villa lease rates.”
The report also highlights a rise in villa rents, which have recovered to pre-COVID levels and currently stand 3.6% above January 2020 figures. Notably, Saadiyat Island (AED 84 psf) and Al Raha Beach (AED 69 psf) have experienced the highest growth in rents since the onset of the pandemic.
Also published on Medium.
