Abu Dhabi’s Real Estate Market Continues Its Upward Trajectory In Q4 2023

The latest Abu Dhabi 4th quarter real estate review report from ValuStrat, a globally recognised consultancy specialising in multi-sector advisory services, has revealed insightful dynamics in Abu Dhabi’s real estate market. The comprehensive report illustrates a market that not only sustains its growth momentum but also showcases significant resilience across various segments, including residential, commercial, hospitality, and industrial sectors.

The ValuStrat Price Index (VPI) for Abu Dhabi’s residential market has observed an annual increase of 4.2% and a quarterly rise of 1%. The villa market saw 1.7% quarterly and 5.7% annual growth, while apartments saw a steady annual increase of 2.7%.

Rental values in Abu Dhabi have also witnessed promising growth, with the VPI for annual rental values expanding by 6.4% annually and 1% quarterly. The villa segment experienced a notable annual rise of 7.5%, and apartments reported a year-on-year increase of 5.3%, reflecting the continuous demand in the rental market.

Haider Tuaima, Director and Head of Real Estate Research at ValuStrat, commented on the residential market’s performance, “Continued steady price and rental growth during Q4 2023 demonstrates a maturing market in Abu Dhabi’s ready home sales, this is supported mostly by domestic buyers. High demand for off-plan properties has been evident with an increase from foreign investors.”

The year 2023 saw the completion of 2,587 apartments, marking 42% of the anticipated residential developments, underscoring the sector’s dynamic response to growing demand. The report highlights a significant uptick in residential prices per square foot, driven largely by the off-plan market, with a quarterly increase of 15.5% and an annual surge of 23.1%.

In the commercial arena, Abu Dhabi’s office sector demonstrated remarkable strength, with the average sales price soaring by 55% quarterly and office asking rents in prime districts escalating by over 11.3% quarterly and 13.3% annually. The central business districts reported an impressive average occupancy rate of 90%, a testament to the city’s flourishing business ecosystem.

The hospitality sector shone brightly, with Average Room Rates (ARR) and Revenue Per Available Room (RevPAR) witnessing year-on-year increases of 23% and 26%, respectively. Total hotel revenues leapt to AED 4.5 billion, a 27% increase from the previous year, highlighting the sector’s significant recovery and growth.

Furthermore, the industrial real estate segment saw warehouse prices and rents rise, with industrial asking rental rates climbing by an average of 14.8% quarterly, indicating robust demand in the logistics and warehousing sectors.

ValuStrat’s Q4 2023 report provides crucial insights for stakeholders, illustrating the Abu Dhabi real estate market’s vibrant growth trajectory and its promising outlook for the future.

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