August 2015 saw Abu Dhabi registering some expected spikes in both the rental and sale markets. The government’s decision to introduce a rental index by the year-end coupled with similar efforts to regulate the property market has boosted demand in Abu Dhabi’s realty sector.
As Abu Dhabi continues to diversify its economy, investment in infrastructure and economic development projects continue to create jobs, leading to a sustained demand for housing and accommodation owing to a rising number of workers arriving in the emirate.
From what we have observed, increasing housing demand coupled with a constrained supply of units has been pushing rents upwards. Only about 6,000 residential units are expected to enter the market in 2015, though the demand has been much more than that so far. The majority of units under construction are likely to be delivered in The Wave, Saraya and Hydra Avenue on Al Reem Island, C59 in Rawdhat and Amwaj 2 at Al Raha Beach.
Abu Dhabi rents
In August 2015 Al Reem Island topped Bayut’s popularity index for rental areas in Abu Dhabi. The other top-five localities for renting apartments were Al Raha Beach, Al Khalidiyah, Khalifa City A and Al Reef, respectively.
The average rentals for properties in Al Reem Island were AED 72,192 for studio apartments, AED 98,769 for a 1-bedroom, AED 140,565 for 2-bedroom, AED 191,358 for 3-bedroom and AED 413,000 for 4+ bedroom apartments.
Average residential rents in Khalifa City A during August were AED 36,000 for a studio, AED 82,667 for a 1-bedroom, AED 129,000 for 2-bedroom, AED 129,000 for 3-bedroom and AED 130,000 for 4+ bedroom apartments.
Abu Dhabi sales
In August 2015, the most popular localities for buying properties in Abu Dhabi were Al Reem Island followed by Al Reef and Al Raha Beach. Saadiyat Island and Al Raha Gardens followed the top three localities registering interest from different buying classes along the way.
In August 2015, average prices for apartments in Al Reem Island were AED 782,197 for studio, AED 1,281,577 for a 1-bedroom, AED 1,924,295 for 2-bedroom, AED 2,859,480 for 3-bedroom and AED 6,411,431 for 4+ bedroom apartments.
In Al Raha Beach, studio apartments cost AED 1,250,333 on average, while 1-bedroom apartments cost AED 1,518,070, 2-bedroom apartments cost AED 2,489,859, 3-bedroom apartments cost AED 3,507,555 and 4+ bedroom apartments cost AED 4,621,206.
We believe the real estate sector of Abu Dhabi is steadily emerging as a force to be reckoned with. The UAE capital is likely to garner the interest of more and more investors in the months to come as its realty sector has been strengthened by new regulations and offers ample avenues of prime realty investment.
The prospects for the real estate sector Abu Dhabi are as good as any, as prices here are still lower and returns often much more than most global cities it competes with.
Kainat Malik is Online Marketing Associate at Bayut.com