Abu Dhabi’s freehold property market steady prior to COVID-19

Published: 4 May 2020 - 10:44 a.m.

While the COVID-19 situation has created unprecedented challenges for the brokerage community, property prices in Abu Dhabi have been largely steady in the first three months of the year, according to Bayut’s Q1 2020 Market Report.

The report states that Abu Dhabi real estate market stakeholders have come together to mitigate the impact of the pandemic on the industry.

Freehold investment zones in Abu Dhabi such as Al Reem Island and Al Reef – where prices have mostly remained stable in Q1 2020 compared to the previous quarter – have continued to attract the attention of prospective buyers and investors in the capital.

Al Reem Island also recorded the highest value of real estate transactions in 2019 worth $1.77bn (AED6.52bn), according to the Abu Dhabi’s Department of Municipalities and Transport (Abu Dhabi - DMT).

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Properties for sale in Abu Dhabi

Following on trends observed in 2019, Al Reem Island has remained the most popular choice with buyers and investors interested in apartments for sale in Abu Dhabi in Q1 2020.

The average price per square foot in Al Reem Island has seen a minor decrease of 2%, going from $275 (AED1,011) in Q4 2019 to $248 (AED911) in Q1 2020.

Other waterfront communities such as Al Raha Beach, Saadiyat Island, and Yas Island have continued to garner interest from buyers for ready apartments.

The price per square foot for Al Raha Beach has also declined on average by 3.6% from $346 (AED1,271) to $333 (AED1,225) in Q1 2020.

However, Saadiyat Island and Yas Island have seen prices remain stable at $398 (AED1,465) and $363 (AED1,336) respectively.

Affordable suburbs such as Al Reef and Al Ghadeer have also drawn interest from buyers and investors keen on affordable apartments in Abu Dhabi.

When it comes to villas for sale in Abu Dhabi, Al Reef has remained the most popular choice with the average price per square foot staying consistent at $167 (AED614).

Other notable areas for villa sales in Abu Dhabi include Saadiyat Island, another neighbourhood where the price per square foot has stayed stable at $389 (AED1,430).

Yas Island and Al Raha Gardens have experienced a slight increase in price per square in the Q1 2020, averaging at $230 (AED846) and $210 (AED773) respectively.

For investors looking to purchase apartments with high return-on-investment in Abu Dhabi, Al Ghadeer has remained the firm favourite with average rental returns up to 8.6%. For villas in Abu Dhabi, Al Reef has remained the best option, with an average ROI of 7%.

When it comes to the off-plan market in Abu Dhabi, freehold island communities such as Yas Island, Al Reem Island, and Saadiyat Island have remained the favoured options.

Yas Acres in Yas Island has been the most popular choice among prospective buyers interested in off-plan villas in Abu Dhabi while Shams Abu Dhabi in Al Reem Island has been most sought after for off-plan apartments in Q1 2020.

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Properties for rent in Abu Dhabi

Al Reem Island has retained the top spot with potential tenants interested in Abu Dhabi’s apartments as per Bayut’s report.

The rental costs in Al Reem Island have remained stable in Q1 2020, averaging at $13,067 (AED48,000) for studio apartments, $17,423 (AED64,000) for 1-bedroom flats, and $24,774 (AED91,000) for 2-bedroom units.

The average rental costs in Al Khalidiya, Al Hamdan Street, Khalifa City A and Mussafah have also stayed consistent or experienced a minor uptick in prices for certain bed-types.

Other popular areas for rental apartments such as Al Muroor, Al Nahyan, and Tourist Club Area have seen minor decreases in rental costs under 5.5% in Q1 2020.

Mohammed Bin Zayed City (MBZ City) has remained the most popular location for rental villas in Abu Dubai in Q1 2020, with average rents holding steady at $23,957 (AED88,000) for 3-bedroom villas, $33,485 (AED123,000) for 4-bedroom houses, and $38,930 (AED143,000) for 5-bed units.

Relatively stable suburban areas such as Khalifa City A, Al Reef and Shakhbout City (Khalifa City B) have been the other favourites with renters interested in villas in Abu Dhabi.

Commenting on the performance of Abu Dhabi’s property market, the chief executive officer of Bayut, and the head of MENA for EMPG, Haider Ali Khan, said: “In the first three months of 2020, before our community was impacted by the unfortunate global incident, the Abu Dhabi real estate market was showing healthy signs of stability which is clearly visible from our Q1 report.”

“The effects of the current situation on consumer interest in the capital’s property market have not been too drastic thanks to the timely measures and economic stimulus packages introduced by the government, and now that the restrictions are easing up further, we’re hopeful things will start going back to normal fairly soon.”

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