Abu Dhabi’s apartment asking prices surged by up to 9.2% in the third quarter of 2023, driven by robust demand across various segments, according to a recent report from Bayut. This increase reflects a growing interest in both affordable and mid-tier communities, with Baniyas leading the charge in price hikes.
Bayut’s analysis indicates that mid-tier apartments in Baniyas saw the most significant rise, with average advertised prices per square foot climbing 9.2%. Following closely, affordable apartments in Al Ghadeer experienced a 6.2% increase. Other areas, including Al Shamkha and Masdar City, also reported price increases ranging from 3% to 9.2% during the quarter. On Al Maryah Island, prices rose by 3.2%.
Demand Across Diverse Segments
Al Ghadeer emerged as the most searched location for affordable apartments, with Al Reef and Al Shamkha also attracting considerable interest. In the mid-tier category, Al Reem Island led searches, while Masdar City and Baniyas followed suit. For luxury apartments, Yas Island and Al Raha Beach were the top choices, with Saadiyat Island and The Marina appealing to ultra-luxury buyers. This broad demand spectrum highlights the diverse preferences of buyers in Abu Dhabi, ranging from budget-friendly suburban options to premium island developments.
High Projected Rental Yields
Bayut’s data also revealed promising rental yields in various communities. Affordable apartments in Al Reef are projected to offer a gross rental yield of 7.9%, while Al Samha recorded 7.1% in the mid-tier category. Luxury apartments on Al Maryah Island are expected to yield around 7%, with The Marina offering 5% for ultra-luxury options. Notably, Al Dhafrah stands out with a projected yield of 11.5% for villas, while Between Two Bridges offers 10.1% in the affordable villa category.
Off-Plan Market Activity
The off-plan market in Abu Dhabi continues to thrive, with Al Reeman 1 and Reeman Garden 1 being popular choices among affordable projects. Shams Abu Dhabi led the mid-tier segment, while Gardenia Bay attracted luxury apartment searches. Off-plan properties accounted for 81% of the 6,085 residential transactions recorded in Q3, despite a 19% decline in transaction volumes compared to the previous quarter. However, average apartment values remained 9% higher year-on-year, with villa and townhouse values up by 8%.
As the market evolves, rental asking prices have remained stable across many sought-after communities. Khalifa City and Al Reem Island led searches for affordable and mid-tier apartments, while Al Raha Beach and Saadiyat Island were preferred in the luxury and ultra-luxury categories. A sentiment survey conducted by Bayut and dubizzle indicated that half of the respondents expect rental prices to remain stable over the next year, while 25% anticipate an increase.
Looking ahead, 46% of prospective buyers surveyed expect property prices to rise in the next 12 months, with 60% expressing confidence in the UAE property market over the next five years. Haider Ali Khan, CEO of Bayut, noted that Abu Dhabi is increasingly attracting interest in ultra-luxury homes and branded residences, alongside a growing array of off-plan projects appealing to international high-net-worth individuals and institutional investors.
For further insights, refer to Economy Middle East.
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