Abu Dhabi real estate market report for H1 2019: Freehold areas in Abu Dhabi dominate investor attention in 2019

Over the first half of 2019, the Abu Dhabi real estate market has seen some significant developments. The most important is the change to freehold ownership laws in Abu Dhabi, which now allows expats and foreigners to own freehold property in the UAE capital. This announcement made waves in the UAE real estate news and is expected to further increase property investments in Abu Dhabi in the long run. With this in mind, MyBayut today, will be analysing the performance of the Abu Dhabi property market in H1 2019. To do so, our data experts have compared property prices in Abu Dhabi from the first half of 2019 to the last half of 2018.

Property prices in Abu Dhabi have experienced slight drops across the board, however luxury areas like Saadiyat Island and Yas Island show the potential of bottoming out. Property trends in the capital show that there is continued interest in new freehold areas such as Al Reem Island, Al Reef and Al Raha Beach. However, suburban areas like Mohammed Bin Zayed City, Khalifa City A and Masdar City are picking up interest for their affordability and accessible locations.

When it comes to rental trends, Bayut users have shown a clear inclination towards affordable areas like MBZ City, Al Muroor, Al Khalidiyah and Al Reef. This could be a result of tenants choosing to upgrade to larger properties in these areas, taking advantage of lower prices right now.

Let’s take a closer look at how the Abu Dhabi real estate prices have evolved over the last six months, between those seen in H2 of 2018 to H1 of 2019. Please note that the average ROI is measured for the overall area and can vary based on the property types. 

BUYING PRICES FOR APARTMENTS IN ABU DHABI EXPERIENCE SLIGHT DECLINES IN 2019

PROPERTY PRICES IN ABU DHABI FOR TOP AREAS TO BUY APARTMENTS

Property prices in Abu Dhabi for apartments remain competitive in the first half of 2019, with sales prices witnessing modest declines. Bayut’s Abu Dhabi property report reveals that interest remains high in waterfront areas like Al Reem Island and Al Raha Beach, where a slight decline in prices has resulted in more affordability for luxury units. However, there is still consistent demand for high-end areas like Yas Island and Saadiyat Island, where prices have more or less remained stable.

In H1 2019, Al Reem Island continues to dominate apartment sales in Abu Dhabi, being the most sought-after location by potential investors. Its proximity to the Abu Dhabi main island, waterfront homes and state-of-the-art amenities continue to attract interest from buyers. Also, being one of the communities that fall under the new Abu Dhabi freehold areas, it’s possible that apartments in Al Reem Island now attract a wider pool of investors than before. Thus, studios in Al Reem Island have seen buying prices increase by 3.4% over the last six months, going up from AED 580k in H2 2018 to AED 600k in H1 2019. On the other hand, sale prices for 1-bedroom apartments and 2-bedroom units have dipped to AED 850k and AED 1.42M respectively.

Other waterfront communities like Al Raha Beach also continue to be popular with investors. The apartments for sale in Al Raha Beach have also seen prices decrease on average, with 1-bedroom units in the area seeing the largest decrease overall in Abu Dhabi. Buying prices for 1-bedroom apartments in Al Raha Beach have fallen by 13.3%, from AED 1.2M to AED 1.04M, according to Bayut’s report on property prices in Abu Dhabi.

One of Abu Dhabi’s latest residential developments, Al Ghadeer, is also frequently searched-for by investors for buying apartments. Its proximity to Dubai has led to a surge in its popularity. Abu Dhabi real estate trends show that sale prices for studios in Al Ghadeer have dropped by 11.1%, from AED 450k to AED 400k in H1 2019. On the other hand, 1-bedroom units have remained unaffected, while 2-bedroom apartments in Al Ghadeer have seen buying prices jump by 6.7%, the largest increase overall in Abu Dhabi. These units now average at AED 800k, up from AED 750k in H2 2018. This could be the result of the delivery of many off-plan projects, as well as a renewed interest in larger properties now that prices are more affordable.

Other areas that attracted attention from potential investors for apartments for sale in Abu Dhabi include Al Reef, Masdar City, Baniyas and Danet Abu Dhabi, where prices have seen decreases between 3% – 8.5%.

AL MUNEERA IS MOST POPULAR WITH BUYERS IN AL RAHA BEACH

The Abu Dhabi property market trends reveal that the sub-community of Al Muneera is the most popular with potential investors, generating 48% of overall interest. Al Muneera is a waterfront neighbourhood that spreads across the mainland and reclaimed island, offering chic apartments in 1, 2, 3 and 4-bedroom layouts. Prices to buy 1-bedroom apartments in Al Muneera start from AED 900k, according to current listings. Other sub-communities that drew the attention of potential investors include Al Bandar (19%), Al Raha Lofts (17%) and Al Zeina (15%).

THE APARTMENTS FOR SALE IN SAADIYAT ISLAND HAVE THE HIGHEST AVERAGE ROI IN ABU DHABI

Bayut’s report of property prices in Abu Dhabi also reveals the areas with the best average return-on-investment in the capital city. The swanky address of Saadiyat Island has the best average ROI in Abu Dhabi for apartments, delivering average rental returns of an impressive 8.7%. This is closely followed by the apartments in Al Reef, which also have an average rental yield of 8.6%. While these numbers reflect the overall average ROI for the area, the specific ROI is dependent on the property type you own. 

Other areas that investors should look at for buy-to-let properties include Al Ghadeer and Masdar City, which deliver average rental returns in Abu Dhabi of 7.8%.

PROPERTY PRICES IN ABU DHABI FOR RENTAL APARTMENTS REMAIN AFFORDABLE

PROPERTY PRICES IN ABU DHABI FOR TOP AREAS TO RENT APARTMENTS

Tenants will be glad to know that overall prices for renting apartments in Abu Dhabi remain attractive in the first half of 2019. Abu Dhabi real estate trends reveal that the most popular areas for renting apartments are a mix of older, established districts and newer suburban communities.

Al Reem Island rises to become the top area for renting apartments in Abu Dhabi. The plethora of family-friendly amenities, as well as upcoming attractions like Reem Mall, make this location popular with families and single professionals. Prices to rent apartments in Al Reem Island have only seen minor decreases in H1 2019, averaging at AED 50k for studios, AED 65k for 1-bedroom units and AED 90k for 2-bedroom units.

Mohammed Bin Zayed City has also grown in popularity with potential tenants for its affordable rentals, the wealth of amenities and connectivity to Dubai.  It’s reflected in the rising rental prices for studios and 1-bedroom apartments in MBZ City, which now average at AED 27k and AED 40.5k respectively. However, 2-bedroom flats for rent in MBZ City have seen prices dip by 8.3%, from AED 60k to AED 55k.

Other suburban developments on the mainland like Khalifa City A are also picking up in popularity. On the other hand, established areas on the main island like Airport Street, Hamdan Street and Corniche Area have seen Abu Dhabi property prices for rentals decline for larger units. This could be a result of tenants, especially families, taking advantage of the current climate and negotiating better rental deals. 

MARINA SQUARE IS THE MOST POPULAR FOR RENTING APARTMENTS IN AL REEM ISLAND

The sleek, high-rise residential towers of Marina Square attract the most interest from potential renters in Al Reem Island, drawing 26% of overall searches. With units ranging from studios to 4-bedrooms, the rental apartments in Marina Square cater to a variety of residents.

The City of Lights is the second-most popular when renting in Al Reem Island, followed by Shams Abu Dhabi, Shams Gate District and Najmat Abu Dhabi.

PRICES TO BUY VILLAS IN ABU DHABI STABILISE IN FIRST HALF OF 2019

PROPERTY PRICES IN ABU DHABI FOR TOP AREAS TO BUY VILLAS

Bayut’s real estate market report reveals that property prices in Abu Dhabi to buy villas appear to bottom out in H1 2019, with only minor changes. The most searched-area with villas for sale in Abu Dhabi is Al Reef, a development that lies just behind the Abu Dhabi International Airport. Favoured for its family-friendly nature and affordable prices, Al Reef is an ideal residence for those who commute often to Dubai. The sales prices for villas in Al Reef have dipped by 1% – 8% over the last six months. Potential investors can expect to pay an average of AED 1.45M for 3-bedroom villas, AED 1.98M for 4-bedroom units and AED 2.12M for 5-bedroom units.

Coming in second for popular areas to buy villas in Abu Dhabi is Saadiyat Island. With state-of-the-art amenities, lush golf courses and renowned museums, villas in Saadiyat Island are the perfect addition to any high-profile investor’s property portfolio. The upcoming cultural attractions on Saadiyat Island will also add to the value of these villas for sale in Abu Dhabi. The prices for Saadiyat Island villas for sale have been largely unaffected, averaging at AED 6.3M for 3-bedroom units, AED 6.75M for 4-bedroom units and AED 8.65M for 5-bedroom units.

Other top areas where potential investors look to buy villas in Abu Dhabi are Yas Island, Khalifa City A and MBZ City. 

ARABIAN STYLE IS MOST FAVOURED BY INVESTORS IN AL REEF VILLAS

When it comes to Al Reef Villas for sale, Arabian Style or Village draws the lion’s share of overall searches at 36%. Arabian Style villas in Al Reef come in 2 to 5-bedroom layouts, offering a variety of choices for families. The starting price to invest in Arabian Style villas is AED 1.1M, which is an ideal opportunity for smaller investors. Coming in second is Mediterranean Style, followed by Desert Style and Contemporary Style.  

AL REEF HAS THE BEST AVERAGE RENTAL RETURNS IN ABU DHABI FOR VILLAS

For investors looking to get high rental yields in Abu Dhabi, Al Reef villas for sale have the best average ROI of 7.1%. These reasonably-priced villas for sale in Abu Dhabi present an opportunity for buyers to take advantage of the favourable market conditions. Other areas with high average ROI in Abu Dhabi for villas are Yas Island (5.1%) and Saadiyat Island (4.6%). When further entertainment and retail attractions open up in these areas, we could see these figures rise in coming years.

PROPERTY PRICES IN ABU DHABI FOR RENTING VILLAS EXPERIENCE MODERATE DECLINES

PROPERTY PRICES IN ABU DHABI FOR TOP AREAS TO RENT VILLAS

In H1 2019, property trends in Abu Dhabi real estate market indicate a clear interest in suburban, mainland developments like MBZ City, Khalifa City A and Al Reef.

Mohammed Bin Zayed (MBZ) City is a continued favourite with potential tenants, coming in as the top area with villas for rent in Abu Dhabi. Close to schools, restaurants, clinics and parks, MBZ City has established itself as an affordable haven for families. The Abu Dhabi property prices trends show that rentals for MBZ City villas have dropped around the 7% mark for 3-bedroom and 4-bedroom villas, which gives tenants ample opportunity to upgrade to larger homes. Renters can expect to pay an average price of AED 90k for 3-bedroom villas in MBZ City and AED 130k for 4-bedroom villas. Meanwhile, property prices in Abu Dhabi for renting 5-bedroom villas in MBZ City have also dipped slightly to AED 145k.

The nearby Khalifa City A is also popular with tenants looking for villas in Abu Dhabi, which offers residents a quiet retreat away from the hustle and bustle of the city. But for those who like to be in the middle of the action, the attractions of Yas Island are a short drive away. Abu Dhabi property price trends show that rentals have declined by 6% – 7% across the board. Average prices to rent villas in Khalifa City A stand at AED 130k for 3-bedroom units, AED 150k for 4-bedroom villas and AED 165k for 5-bedroom units.

Shakhbout City (Khalifa City B) and Al Reef are other residential communities on the outskirts of Abu Dhabi that have caught the attention of tenants. Aside from these, a mix of older areas like Al Mushrif and Al Bateen and waterfront developments like Saadiyat Island are favoured by renters in the city. Trends for property prices in Abu Dhabi shows that when it comes to the rental villas, prices have mostly gone down between the 3% – 9% margin. The most prominent drops are for 3-beds in Saadiyat Island where average rental prices went down by 9.1% from AED 330k in H2 of 2018 to AED 300k in H1 of 2019. This was also the case for 5-beds in Al Muroor, where prices dipped by 9.1% from AED 220k to AED 200k. 

MOHAMED BIN ZAYED CENTRE IS MOST DESIRED AREA WITH VILLAS FOR RENT IN MBZ CITY

Property trends in Abu Dhabi reveal that Mohamed Bin Zayed (MBZ) Centre is by far the most searched-for neighbourhood for renting villas in MBZ City. The villas in MBZ Centre, which encompasses Zones 14, 15 and 18, are close to a number of amenities, like schools, mosques, malls and hospitals. Those living in the area can also easily access the Abu Dhabi – Ghweifat Highway (E11), which connects to Dubai. Renters will find that 3-bedroom villas in MBZ Centre have starting prices of AED 100k, which is higher than other zones in MBZ City. The other popular areas to rent villas here are Zones 21, 5, 19 and 2.

TOP OFF-PLAN PROPERTIES IN ABU DHABI

When it comes to off-plan projects in Abu Dhabi, investors have various developments to choose from. However, the most sought-after area is Yas Island, whose world-famous theme parks and racing circuits have attracted investors globally. The most popular off-plan properties in Yas Island is Yas Acres, which offers high-end, contemporary 2 to 6-bedroom villas, starting from AED 2.35M.

This is followed by Saadiyat Island, also an ALDAR development, where the Saadiyat Cultural District is amongst the most popular off-plan projects with upmarket apartments and villas. Other upscale areas like Al Reem Island and Al Maryah Island, which are close to the main island, offer competitive options for those who want to make property investments in Abu Dhabi.

Off-plan projects on Al Salam Street and Al Raha Beach, which have easy access to the Abu Dhabi-Dubai Highway, are also garnering interest from investors in H1 2019.

FORECAST FOR H2 2019

Commenting on the Abu Dhabi property market, Haider Ali Khan, the CEO of Bayut, said,

In the first half of 2019, we’ve seen Abu Dhabi take significant steps to cement its position as an attractive option for global investors by opening up its freehold market. In recent years we have seen Abu Dhabi gain more global exposure by playing host to notable international events including the Specials Olympics and the Formula One. These, I believe, will lead to an increase in expat and foreign interest in investing in Abu Dhabi real estate and prime locations like Yas Island and Saadiyat Island stand to benefit,” he said.

“The competitive pricing of the housing market, combined with ongoing development in infrastructure and tourism will not only bolster Abu Dhabi’s position as a global investment destination but also as a place for residents to establish roots.” he continued.

That concludes Bayut’s report of property prices in Abu Dhabi and real estate trends for H1 2019! We hope this report helps you make informed decisions when renting or investing in Abu Dhabi. Take a look at the H1 2019 Dubai property market report to find out the top areas to buy and rent in this vibrant and bustling city. And subscribe to MyBayut to stay updated on the upcoming Sharjah and Ajman market reports, as well. 

Disclaimer: The above report is based on prices advertised by real estate agencies on behalf of their clients on Bayut.com, and not representative of actual real estate transactions conducted in Abu Dhabi.