Abu Dhabi real estate market report for Q1 2019: Investor confidence remains intact in the first quarter of 2019
We are into the fourth month of the year which means it’s now time to explore the trends for property prices in Abu Dhabi in the new year. For this Q1 real estate report for Abu Dhabi, we have compared prices from the last quarter of 2018 to the first quarter of the new year to gauge how the property prices in the capital city have transitioned in the past few months. Here is what we were able to uncover about the property prices in Abu Dhabi.
The first quarter of 2019 shows that the Abu Dhabi property market remains a buyers market due to the presence of high return on investment (ROI) and a large portfolio of affordable properties. Overall sales and rental property prices in Abu Dhabi experienced marginal decreases on average for both apartments and villas. We can also see residential communities such as Mohammed Bin Zayed City (MBZ City), Khalifa City A and Al Reef attracting a significant amount of interest from both tenants and investors, as can be seen from the high volume of searches in these areas.
A number of factors can be attributed to this positive trend of property prices in Abu Dhabi, including delivery of prominent off-plan projects. With that being said, here’s a closer look at the transition of the Abu Dhabi property prices in Q1 2019.
AL REEM ISLAND RETAINS THE #1 POSITION FOR APARTMENTS FOR SALE IN ABU DHABI AS property prices in Abu Dhabi BOTTOM OUT
Seeing the prices trends in the Abu Dhabi real estate market for buying apartments, a large majority of the areas haven’t experienced any significant changes in Q1 2019. The only notable differences for property prices in Abu Dhabi for apartment sales is for 1-beds in Al Raha Beach where the prices dropped by 6.5% from AED 1.1M in Q4 2018 to AED 1.03M now. The other significant change is for 1-bed units in Al Reef where prices dropped by 5.9% from AED 680k to AED 640k.
The stunning waterfront community of Al Reem Island continues to retain its position as the most popular area to buy apartments in Abu Dhabi. The presence of luxury waterfront homes, world-class amenities has kept investor interest high in the area. The sales price for apartments in Al Reem Island have remained largely unaffected with marginal decreases with studios averaging at AED 600k, 1-bed units at AED 872.1k and 2-bed at AED 1.45M.
The Al Raha Beach community, another prime waterfront development in Abu Dhabi came in as the second-most popular area to buy flats in Abu Dhabi. The biggest decline in for prices here, as mentioned earlier is for the sales prices of 2-bedroom apartments in Al Raha Beach that now average at AED 1.03M. As for the sales prices for studios and 1-beds, these experienced no changes and average at AED 940k and AED 1.75M respectively.
The newest residential development, Al Ghadeer which is favoured for its close proximity to Dubai came is as the next most popular. There are minimal changes for most of the units here. Average prices for studios for sale in Al Ghadeer decreased by 4.8%, from AED 420k to AED 400k. As for the 1-bedroom flats, the prices average at AED 587.5k. The only notable price change here is an increase of 6.3% in average sales prices for 2-bedroom apartments in Al Ghadeer from AED 800k in Q4 to AED 850k in this quarter. This could be attributed to the handover of a number of off-plan units in the area.
As for the property price trends in Abu Dhabi for apartment sales in the other popular areas, changes remain modest. The residential areas that made it to the list of popular areas with flats for sale in Abu Dhabi include Al Reef, Yas Island, Masdar City, Saadiyat Island, Baniyas and Danet Abu Dhabi.
THE APARTMENTS FOR SALE IN SAADIYAT ISLAND OFFER THE HIGHEST ROI IN ABU DHABI
From our top 10 most popular areas for investing in the apartments in Abu Dhabi, Saadiyat Island offers the highest ROI in Abu Dhabi of 9.7% for investors. This is followed by the apartments in Al Reef, that have an average rental yield of 8.7%. Other areas in the Abu Dhabi property market that have good ROI for apartments include Masdar City at 7.8% and Al Ghadeer at 7.5%. Bayut’s report for property price trends in Abu Dhabi also shows that apartments in Al Reem Island and Al Raha Beach also offers high rental yields of 6.9%.
MBZ CITY TAKES THE CROWN FOR RENTING APARTMENT IN ABU DHABI
Moving over to the property prices in Abu Dhabi for rental apartments, the most the significant changes are for 2-bedroom units in MBZ City which experienced a 13% drop from Q4 of 2018. This was followed by a 9.4% decrease for 2-bed units in Corniche Road from AED 127k in the last quarter of 2018 to AED 115k in Q1 2019. There is also a 7.1% decrease for 2-bed units in Al Muroor and Al Nahyan where the average prices went from AED 75k to AED 65k in both cases.
Popular with residents for its suburban vibe, Mohammed Bin Zayed City is once again the most favoured for renting apartments in Abu Dhabi. Apart from the 13% drop in rents for 2-bedroom flats in MBZ City from AED 58k in Q4 to AED 50k in the present quarter, there were no significant changes. Sales prices for buying studios and 1-bedroom apartments remain at AED 25.5k and AED 42k respectively.
Al Reem Island is the next most popular area for renting flats in Abu Dhabi. Here average rents experienced marginal changes. Prices for renting studios here went down from AED 52k in Q4 2018 to AED 50k now. The rents for 2-bedroom apartments in Al Reem Island went from AED 95k to AED 90k. As for the rental prices for the 1-bedroom flats in Al Reem Island, they experienced no change and average at AED 65k.
The urban area of Al Khalidiya, a community for young professionals as well as larger families ranked third on our list of in-demand areas to rent apartments in Abu Dhabi. For the 1-bedroom units here the rents remain constant at AED 60k. The average rents for 2-bedroom units in Al Khalidiya experienced a decline of 6.7% from AED 75k in Q4 2018 to AED 70k in the present quarter.
The other popular areas to rent flats in Abu Dhabi include Khalifa City A, Hamdan Street, Al Muroor, Airport Street, Corniche Area, Al Nahyan and Corniche Road. In these areas, prices for all the units in Corniche Area and Airport Street have remained unchanged. Rest of the areas experienced changes between the 0-6% mark.
WHERE TO RENT AFFORDABLE APARTMENTS IN THE ABU DHABI REAL ESTATE MARKET? (MBZ VS. KHALIFA CITY A)
While moving homes, price point, amenities and lifestyle are key aspects tenants should factor in before making a decision. Tenants looking to upgrade to a larger 2 BHK apartment in Abu Dhabi can find stunning units in both MBZ City and Khalifa City A. But how can you know which is right for you? The following area comparison between MBZ City and Khalifa City A will give you some insight.
MBZ City and Khalifa City A are both neighbourhoods that are popular for their affordability. They are both centrally located in the capital city and offer residents an array of luxurious amenities and facilities. However, from a price point perspective, living in MBZ City is the more affordable option. Average prices for renting a 2-bedroom apartment in MBZ City is at AED 50k while rents for a 2 BHK flat in Khalifa City A average at AED 70k.
Although MBZ City wins in terms of price, the tenants looking to reside in a community with more amenities and leisure activities will find that living in Khalifa City is the more ideal choice. Not only does it have more options for weekend activities but it also has a larger presence of schools and nurseries in the vicinity. While both are considered to be amongst the best residential communities in Abu Dhabi for families, Khalifa City A is the clear winner in this scenario.
AL REEF IS THE MOST POPULAR NEIGHBOURHOOD WITH VILLAS FOR SALE IN ABU DHABI
When comparing Abu Dhabi property prices for villas sales in Q4 2018 to now, we can see a trend of marginal declines between the 1-6% margin. This shows that investor confidence remains intact when it comes to investing in Abu Dhabi.
Among all the popular areas to buy houses in Abu Dhabi, the Al Reef community continues to gather high interest from investors. This is the only area to experience noticeable price changes for its units. Here average prices to buy a 5-bedroom villa in Al Reef decreased by 6.2% from AED 2.27M to AED 2.13M. This is followed by a 4.6% drop from AED 1.52M to AED 1.45M for sales prices for 3-bedroom houses in Al Reef. As for the average sales prices for the 4-bed units here, they remain unchanged at AED 1.98M.
Saadiyat Island which ranks as the second most sought-after area for buying houses in Abu Dhabi experienced minimal decreases. Investors thinking of purchasing villas in Saadiyat Island will find prices averaging at AED 6.3M for 3-beds, AED 6.8M for 4-bed and AED 8.65M for 5-beds.
Investing in luxury properties in Abu Dhabi is a clear favourite amongst buyers as Yas Island is the third most in-demand area in the capital city for villas. The sales prices for buying villas in Yas Island largely unchanged and average at AED 3.1M, AED AED 4.1M and AED 4.66M for 3, 4 and 5-bedroom units respectively.
The established neighbourhoods of Khalifa City A and MBZ City which are popular for their close access to Abu Dhabi’s leading schools are the next most sought-after villa communities in the capital city. In both these neighbourhoods, price trends show the potential of bottoming out.
THE VILLAS FOR SALE IN SAADIYAT ISLAND OFFER THE HIGHEST ROI IN ABU DHABI
Investors looking at the villas for sale in Abu Dhabi will receive the highest ROI of 7.1% in Al Reef. Yas Island also offers a high potential for ROI at 5.2% followed by Saadiyat Island (4.5%) and Khalifa City (3.1%).
WHERE TO BUY A HOUSE IN THE ABU DHABI PROPERTY MARKET? (SAADIYAT ISLAND VS. YAS ISLAND)
As seen in the Abu Dhabi real estate market trends for villas, upscale villas in developments such as Saadiyat Island and Yas Island are rising in popularity with investors as they have a potential for offering a high rental yield. For investors contemplating investing in the houses for sale in Abu Dhabi, Saadiyat Island and Yas Island, two of the capital city’s prime residential island developments offer a spectacular range of luxurious waterfront villas for sale.
In comparison to Saadiyat Island, Yas Island is the clear winner when it comes to average sales prices. The 3-bedroom villas for sale in Yas Island are priced at an average of AED 3.1M while the 3-bedroom villas for sale in Saadiyat Island investors can expect to pay double the prices at AED 6.3M. Yas Island is not only the more affordable option amongst the two, but it also offers a higher ROI of 5.1% as compared to a 4.5% ROI in Saadiyat Island.
Both these waterfront developments feature an impressive array of leisure activities; Saadiyat Island features cultural attractions such as the Louvre Museum while Yas Island features high-octane theme parks such as Ferrari World and Yas Waterworld for the thrill seekers. However, in comparison, Yas Island has a lot more going on due to the presence of over 160+ restaurants, the Yas Gateway Park, mosques, a hospital and also the famous Yas Mall.
MBZ CITY ALSO RANKS AS THE MOST POPULAR AREA TO RENT VILLAS IN ABU DHABI
Abu Dhabi real estate price trends for villa rentals show an overall decline from Q4 2018, however, the changes have remained marginal. The only noticeable change is an 8.3% drop in rents for 3-bedroom villas in Al Muroor from AED 120k in Q4 2018 to AED 110k now. This is followed by a 7.7% drop for 3-bed villas in Saadiyat Island, where prices fell from 325k to AED 300k.
Pushing Khalifa City A to the second position, MBZ City has emerged as the more popular choice for renters in Q1. Here the rental prices for the villas in MBZ City have experienced decreases within a 3% margin. Rental for 3-bedroom houses here averages at AED 95k, 4-bedroom houses average at AED 130k, and 5-bed units average at AED 145k.
Home to the famous Abu Dhabi Golf Club, Khalifa City A remains a favourite amongst those looking rent villas in Abu Dhabi as it is in the second position. The noteworthy changes can be seen in the 4-bedroom rental houses in Khalifa City A where prices went down by 6.3% from AED 160k in Q4 2018 to AED 150k now. Rents for the 3 and 5-bed houses in Khalifa City A average at a steady price of AED 140k and AED 170k respectively.
The villas for rent in Al Reef are the third most popular area to buy houses in the Abu real estate market. The rent prices here experience marginal changes between 2-4% and average at AED 104k for 3-beds, AED 130k for 4-beds and AED 139 for 5-beds.
Other areas that have attracted attention from potential tenants include Shakhbout City (Khalifa City B), Al Muroor, Saadiyat Island, Al Raha Gardens and Al Karamah. Property prices in Abu Dhabi’s rental market for these areas saw declines between the 1- 6% mark. The only areas to see no change in rent prices from Q4 2018 are Shakhbout City (Khalifa City B) and Al Karamah.
POPULAR OFF-PLAN PROJECTS IN ABU DHABI
The top off-plan projects in Abu Dhabi searched by Bayut users is the final aspect that the Q1 2019 property market report explores. Luxury projects are a clear favourite amongst investors as those attracted the most attention.
In Yas Island, Yas Acres which is said to offer upscale villas with a Rivera lifestyle is the most popular off-plan project in Abu Dhabi for Q1 2019. It accounted for 53.1% of the searches. As per Bayut’s current listings, investors can expect to pay a minimum of AED 2.35M as the starting price of for the villas for sale in Yas Acers.
In Saadiyat Island, the mid-rise apartment building of Park View was the most searched for garnering 33% of the searches. The prices to buy an apartment in Park View starts AED 733k for a studio, according to Bayut’s latest listings.
As for Al Reem Island, Shams Abu Dhabi had the lion’s share of searches. Al Raha Beach and Al Salam Street also made it to the list of in-demand off-plan communities in Abu Dhabi.
Forecast for Q2 2019
Haider Ali Khan, CEO of Bayut, said: “The Abu Dhabi property market has undergone tremendous changes in the last two years, with several high profile off-plan projects being handed over and more luxury properties entering the market, particularly in waterfront communities such as Yas Island and Saadiyat Island. We have also seen a high number of prospective buyers searching for luxury properties in these areas, along with other upscale neighbourhoods such as Al Reem Island. Most decreases in the capital have remained modest with changes largely falling within the 5-6% margin. Another interesting trend is the increased popularity for communities such as Khalifa City A, Shakhbout City and Al Ghadeer which are all ideally located for those commuting to Dubai. We can expect these trends to carry on into the summer, and perhaps even see increases when more handovers are completed in the second half of the year.”
And that brings an end to Bayut’s Q1 2019 real estate market report for Abu Dhabi. If you’d like to see the property price trends this quarter in the other emirates, here is our Q1 2019 real estate market report for Dubai. For the real estate market reports from Sharjah and Ajman keep an eye out on the Market Trends section of our blog.
Disclaimer: The above report on the property prices in Abu Dhabi is based on properties 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.
