Abu Dhabi property market report for Q3 2019: New freehold property laws positive for property sales in the capital

Following the release of our Q3 property market report for Dubai, it’s now time to take a look at the evolution of property prices in Abu Dhabi in the third quarter of 2019.

Let’s take a close look at all the popular areas for renting and buying in the capital and how the real estate prices in Abu Dhabi have fared this quarter. To get an accurate representation of the sales trends for villas and apartments in the top areas, this report on property prices in Abu Dhabi compares the average price per square foot in Q2 of 2019 to Q3 of 2019. These prices are however subject to change within an area and property type, based on the building, amenities, developer and other deciding factors. For the rental properties, the report compares the average cost for individual unit types between the two quarters in the popular neighbourhoods of Abu Dhabi.

Trends seen in Bayut’s Abu Dhabi Real Estate Market Report for Q3 2019

The latest report of property prices in Abu Dhabi reveals that the real estate market is showing healthy conditions after opening up freehold property ownership to foreign expats. Investment zones like Al Reem Island, Al Raha Beach, Al Reef and Saadiyat Island dominate the interest of investors and potential homeowners in the capital.

As for the rental market, the more established suburbs such as Mohammed Bin Zayed City (MBZ City), Khalifa City A and Al Muroor remain a popular choice for tenants, with rents in Abu Dhabi experiencing marginal declines overall.

In terms of popularity, the property trends in Abu Dhabi for Q3 of 2019 show that Al Reem Island takes the crown as the most popular area to buy and rent apartments in Abu Dhabi. For villas in Abu Dhabi, Al Reef is the most popular area with buyers and MBZ City is the favoured choice for tenants.

AL REEM ISLAND TAKES THE LEAD FOR APARTMENT SALES IN ABU DHABI

PROPERTY PRICES IN ABU DHABI TO BUY FLATS FOR Q3 2019

Following the trend seen in our H1 2019 market report, Al Reem Island is the most searched for area by investors and buyers looking to purchase apartments in Abu Dhabi. The average price per square foot experienced a marginal drop of 2.2%. This drop is also reflected across the board in the average cost for apartments in Al Reem Island. Studios for sale in Al Reem Island went from AED 600k in Q2 2019 to AED 550k now, while 1-bedroom flats for sale went from AED 860k to AED 850k. Average sale prices for Al Reem Island’s 2-bedroom apartments also dropped from AED 1.4M to AED 1.35M.

Coming in as the second most popular area to buy flats in Abu Dhabi is Al Raha Beach where the average price per square foot remained relatively stable at AED 1,206. The overall cost to buy apartments in Al Raha Beach showcases stability with studios averaging at AED 930k, 1-bedrooms at AED 1.16M, and 2-bedrooms at AED 1.7M respectively.

Following the top two areas, investment zones such as Al Ghadeer, Masdar City, Saadiyat Island and Al Reef have garnered high interest with buyers looking at apartments for sale in Abu Dhabi. Homeowners in these communities will be happy to note that the Abu Dhabi property price trends in these neighbourhoods are showing an increase in average price per square foot of up to 5%. Other popular neighbourhoods with flats for sale in Abu Dhabi are Yas Island, Baniyas, Al Maryah Island and Danet Abu Dhabi. Al Maryah Island has also recently unveiled the extended version of Galleria Mall. The upscale facilities and beautiful properties have made this emerge as one of the newly popular areas to buy flats in the capital.

THE APARTMENTS FOR SALE IN AL MARYAH ISLAND HAVE THE HIGHEST ROI IN ABU DHABI

Investors looking for apartments with the best ROI in Abu Dhabi should consider Al Maryah Island, which delivers rental returns of up to 10.6%. Areas such as Masdar City, Baniyas, Al Reef and Saadiyat Island also offer great rental yields at the 8% mark for buying apartments in Abu Dhabi. Al Ghadeer which is popular because of its close proximity to Dubai is also ideal for investors keen on purchasing buy-to-let apartments, with an average ROI of 7.6%. Al Raha Beach and Al Reem Island also offer a good ROI in Abu Dhabi for apartments at the 7% mark.

Please note that these figures are the overall ROI for an area, and can vary depending on the sub-community and property type.

AL REEM ISLAND IS THE TOP AREA FOR RENTING APARTMENTS IN ABU DHABI

PROPERTY PRICES IN ABU DHABI FOR RENTING APARTMENTS IN Q3 2019

In Q3 2019, the neighbourhood of Al Reem Island is not just popular with buyers and investors but is highly desired by tenants as well. Rental price trends in this neighbourhood indicate some stability as rents for flats in Al Reem Island have seen a limited change from Q2 2019. Rents for studios in Al Reem Island experienced a minor drop of 2% from AED 50k in Q2 2019 to AED 49k now. As for the rents for 1-bedroom flats and 2 BHK apartments, these units continue to average at AED 65k and AED 90k, respectively.

The established Khalifa City A community is next on the list of top 10 areas to rent flats in Abu Dhabi. Here too rents remain largely unchanged with rental studios averaging at AED 28k, 1-bedroom flats at AED 49k and 2-bed rental apartments at AED 75k.

Real estate price trends in Abu Dhabi’s rental market show that established neighbourhoods continue to remain the favoured choice for tenants.

Other popular areas to rent apartments in Abu Dhabi include Al Khalidiyah, Airport Street, Al Muroor, Corniche Area, Hamdan Street, Corniche Road and Al Nahyan. The average rents in Abu Dhabi for these neighbourhoods show declines in cost between 2% – 5%. The most noticeable declines are at 8.3% for 2-bedroom flats in Corniche Road where rents dropped from AED 120k in Q2 of 2019 to AED 110k now. Rents for 2-bedroom apartments in Airport Street and Al Muroor also experienced a drop of 7.7% from AED 65k to AED 60k in both areas.

Now let’s take a look at the property prices in Abu Dhabi for buying and renting villas in the capital city.

AL REEF RECEIVES THE MAXIMUM INTEREST FOR  BUYING VILLAS IN ABU DHABI

PROPERTY PRICES IN ABU DHABI FOR TOP AREAS TO BUY VILLAS IN Q3 2019

Al Reef once again is the most popular area with villas for sale in Abu Dhabi. The average price per square foot for villas for sale in Al Reef stands more or less steady at AED 625. The same is reflected in the overall cost for villas in Al Reef with 3-bedroom units averaging at AED 1.44M; 4-bedroom houses at AED 1.94M and 5-bedroom units at AED 2.2M.

Saadiyat Island is the next most popular area to buy villas in Abu Dhabi. The average price per square foot, as well as the average cost of villas for sale in Saadiyat Island, remained fairly stable. Investors and home buyers looking to buy a villa in Abu Dhabi’s premier island can expect to pay AED 6.5M for 3-beds, AED 6.6M for 4-bed and AED 9M for 5 beds. The average price per square foot in Saadiyat Island is AED 1,394.

Yas Island, Khalifa City A and Al Raha Gardens were the other popular areas to buy houses in Abu Dhabi. The average price per square foot in these areas remain steady with decreases not exceeding 2%.

The real estate prices in Abu Dhabi for buying houses echo the overall trend favouring the investor market.

AL REEF OFFERS THE MOST ROI FOR BUYING VILLAS IN ABU DHABI

Al Reef which is the top area to buy houses in Abu Dhabi incidentally offers the best rental returns for investors at 7%. Al Raha Gardens also offers an impressive ROI of 7% according to trends for property prices in Abu Dhabi.

MBZ CITY REMAINS THE FIRM FAVOURITE FOR RENTING VILLAS IN THE ABU DHABI REAL ESTATE MARKET

PROPERTY PRICES IN ABU DHABI FOR TOP AREAS TO RENT VILLAS IN Q3 2019

Being close to schools and boasting affordable rents in Abu Dhabi, Mohammed Bin Zayed City consistently takes the top spot to rent villas in the capital city. In the third quarter of 2019, villa units across the board in MBZ City saw marginal increases between 1% – 5%. The 3-bedroom rental villas in MBZ City have seen the most increase at 5% from AED 90k in Q2 2019 to AED 95k now. The rents for 4 and 5-bedroom houses in MBZ City have remained stable at AED 130k and AED 150k respectively.

The second most popular neighbourhood with tenants looking for villas in Abu Dhabi is Khalifa City A, where rents remain unchanged. Rents for 3-bedroom houses in Khalifa City A stand at AED 145k and 4-bedroom villas average at AED 155k. Tenants who are looking for larger homes can rent 5-bedroom villas in Khalifa City A priced at an average of AED 160k.

Other residential communities that have caught the attention of tenants looking to rent houses in Abu Dhabi include Al Reef, Al Muroor, Shakhbout City (Khalifa City B), Al Mushrif, Al Bateen, Saadiyat Island, Yas Island and Al Raha Gardens.

The only noticeable decline in these areas is a 6.7% decrease of rents for 5-bed villas in Shakhbout City from AED 150k in Q2 of 2019 to AED 140k, presently. The other area that saw a notable change is the Al Bateen area, where 5-bed units went up by 9.1%, which can be attributed to the fact that the area has a limited supply of luxurious villa properties, which attract tenants looking at upscale options.

TOP OFF-PLAN PROJECTS IN ABU DHABI

When it comes to off-plan projects in Abu Dhabi, Yas Island is overall the most popular neighbourhood in Abu Dhabi. Within Yas Island, the project that has garnered the most interest is the Yas Acres community, which offers high-end, contemporary 2 to 6-bedroom villas.

The next most searched community with off-plan real estate in Abu Dhabi is Saadiyat Island. Here the most popular off-plan project is Park View, which offers investors and homebuyers anything from modern studios to 3-bedroom apartments. Al Reem Island and Al Raha Beach, which are known to have the best sea view apartments for sale in Abu Dhabi are also garnering interest from investors in Q3 2019.

Other projects that are popular for off-plan property investments in Abu Dhabi, especially for villas, are the houses in Bloom Gardens in Al Salam Street. For investors looking at off-plan apartments, the flats for sale in the Leonardo Residences in Masdar City are a great option. Upscale projects such as Al Maryah Vista apartments are also popular with investors in the third quarter of 2019.

Please note that while the projects mentioned do have off-plan properties, they may have phases that have been completed and handed over.

Haider Ali Khan, the CEO of Bayut also welcomed the positive changes seen in the market.

“Abu Dhabi has always been an attractive market for both local home buyers and those from the expat community. While Emirati and GCC investors dominated the market earlier, expat buyers and investors are also taking advantage of the attractive options in the capital, with the recent announcements of the new laws.

The latest report from the Abu Dhabi Department of Economic Development shows the city’s overall GDP is expected to grow by 3% with non-oil growth projected at 3.9%. With the investor profile extending to a wider audience, we can expect real estate to also contribute further to this growth. If we look at how the trends have evolved over the course of this year on Bayut, communities such as Yas Island, Saadiyat Island, Al Reem Island and Masdar City have shown a good level of interest from potential buyers. These areas alone have raked in close to half a million views in 2019 from users on Bayut, searching for properties available for sale in Abu Dhabi. The appeal is fairly evident; these are all family-friendly communities developed by reputed builders with major tourist attractions, schools and hospitals which makes them promising for those who are looking at homes to buy.”

And that concludes the Abu Dhabi Q3 2019 market report on property prices. Keep following MyBayut for in-depth reports on the Dubai, Sharjah and Ajman real estate markets.

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.