Abu Dhabi Property Market Thrives Amid Surge In Foreign Direct Investment

Bayut, the UAE’s leading property portal, has released an in-depth analysis of the search and pricing trends in Abu Dhabi’s property sales and rental sectors for the first half of 2024. The report reveals significant increases in asking sales prices for both the affordable and luxury segments, reflecting heightened demand for high-quality properties.

Trends for Buying Properties in Abu Dhabi

• Al Reef and Al Ghadeer have emerged as the top choices for affordable apartments. Buyers interested in luxury apartments have preferred properties in Al Reem Island and Al Raha Beach. Al Reef and Khalifa City were the primary focus areas for budget-friendly villas. The coveted destinations of Yas Island and Saadiyat Island, continued to be favourites with HNWIs, buyers and investors seeking luxury villas.
• According to Bayut’s data, the average advertised price-per-square-foot for luxury villas in popular residential island communities rose by up to 10% in H1 2024. Yas Island witnessed a major increase, with prices for luxury houses appreciating by 10.3%, given the increased demand for upscale properties in the area. Luxury apartments in Saadiyat Island recorded the highest appreciation of 6%. Premium flats in Yas Island and Al Reem Island also experienced price increases of 77% and 2.75%, respectively.
• The advertised sales price-per-square-foot in the affordable segment has also generally increased. Notably, apartments in Al Ghadeer recorded a significant increase of 5%, followed by affordable flats in Al Reef, which witnessed a modest rise of 2.16%.
• In the first half of 2024, average sales prices per sq. ft. for budget-friendly villas in the capital increased by up to 7%. Minor increases of 11% and 3.11% were recorded for affordable houses in Hydra Village and Al Reef, respectively. However, villas in Al Ghadeer and Al Samha reported a massive 6.10% and 5.57% hike. Villas in Khalifa City were an exception, witnessing a 1.73% price drop.
• Affordable apartments in Al Ghadeer offered a high projected return on investment (ROI) of 8.52%, emerging as a lucrative investment option in the budget-friendly category. Al Reem Island maintained its popularity for luxury apartment purchases and a strong projected rental yield of 6.94% during the first six months of 2024.
• Among the top ROI locations for villas, Hydra Village offered the highest ROI of 8.08%for affordable houses, while Yas Island luxury villas had an impressive ROI of 89%.
• Affordable off-plan apartment projects,Royal Park and Bloom Living, were the top budget-friendly choices. Island community off-plan developments of Yas Bay, City of Lights and Saadiyat Cultural District attracted luxury buyers.
• Regarding popular off-plan villa projects, Fay Al Reeman 2 was favoured by small-ticket investors, while Yas Acres and Murjan Al Saadiyat remained popular for buying luxury off-plan villas.

Trends for Renting Properties in Abu Dhabi

Bayut’s analysis reveals the dynamic and resilient nature of Abu Dhabi’s rental property market, which continues to thrive.

• Khalifa City and Al Khalidiyah have been prominent choices for affordable apartment rentals. At the same time, Mohammed Bin Zayed City (MBZ City) and Khalifa City have emerged as the top searched areas for renting affordable villas in the UAE capital.
• In the luxury segment, Al Reem Island and Al Raha Beach were preferred locations for renting apartments, while Yas Island and Al Raha Gardens led the rental market for high-end villas.
• Backed by strong demand, rental prices for apartments in popular luxury neighbourhoods have experienced significant growth of up to 21%, particularly in the Saadiyat Island and Al Raha Beach communities. Similarly, affordable apartment rentals have seen appreciation of more than 7% in areas such as Al Muroor.
• A detailed analysis of rental trends observed in the capital for H1 2024 revealed a minor to moderate increase of almost 7% in the rental rates for affordable villas. However, Shakhbout City was an exception, having recorded a minor decline. Up to 12% rent hikes for upscale villas, particularly in Al Bateen reflect a strong market demand.

The real estate market in Abu Dhabi has showcased strong performance in the first half of 2024, making it an attractive option for both local and international investors. The sales sector has shown significant growth, indicating a positive outlook for the remainder of the year. The residential rental market in Abu Dhabi also looks promising, with expectations of continued upward movement in the months ahead.

Commenting on the findings, Haider Ali Khan, CEO of Bayut and CEO of Dubizzle Group MENA, said:“Over the past six months, we have seen the Abu Dhabi real estate market grow, stabilise and then grow again. Recent industry reports by the Abu Dhabi Real Estate Centre (ADREC) confirm that foreign direct investment is at an all-time high in the capital, cementing the emirate’s position as a strong contender among global property markets in the last 18-24 months. The diverse range of off-plan projects currently available in Abu Dhabi has significantly contributed to this heightened interest from international HNWIs and investors, particularly in the luxury segment.With the government proactively bringing in more regulation and transparency, we can expect the properties in the capital to continue drawing both local and international interest. Demand has also remained high on Bayut throughout 2024 with traffic increasing steadily month on month, and we can expect this trend to continue into the second half of the year as well.”