Over the last few months, we have experienced one of the most challenging periods in human history. Despite the difficult environment, data released by the UAE’s leading property website Bayut, reveals that the capital city’s real estate market has largely stayed competitive with property prices for sale and rent predictably declining on average between 1% – 6% in the most popular neighbourhoods of Abu Dhabi in H1 2020 compared to the last six months of 2019.
In terms of popularity, upscale and suburban neighbourhoods such as Al Reem Island, Al Raha Beach, Saadiyat Island and Yas Island have attracted the most attention from investors, while established neighbourhoods like Al Khalidiyah, Khalifa City A and Mohammed Bin Zayed City, which offer greater privacy are popular with tenants. Overall prices across the top areas remain attractive with modest declines in most areas.
According to the Department of Municipalities and Transport (DMT), the Abu Dhabi real estate market has maintained a good momentum of property transactions in the city, despite mobility restrictions. DMT’s report has also confirmed that the value of real estate transactions in Abu Dhabi increased by 34% to reach AED 6.3 billion by the end of April 2020, through 2,617 real estate deals, compared to the AED 4.6 billion transactions which were facilitated through 1,840 deals during the same period last year.
Officials from DMT have also reported that the stimulus packages launched by the UAE to tackle the economic repercussions of the pandemic were a major factor in preserving the vitality of Abu Dhabi’s real estate market.
Bayut’s analysis of Abu Dhabi property trends in H1 2020 have also revealed similar patterns as investors and renters turn to areas with competitive property prices, a wide portfolio of properties, high ROI and good infrastructure.
For apartment sales, Al Reem Island has continued to attract the most attention from investors. The average price per square foot in Al Reem Island has experienced a marginal drop of 2.9%, from AED 998 in H2 2019 to AED 970 in H1 2020. On the other hand, Al Reef has continued to be the most popular choice with prospective buyers looking for villas with the average price per square foot experiencing a minor decline of 3.1% from AED 616 to AED 596, increasing the appeal of the competitively priced neighbourhood among buyers.
When it comes to ROI, Al Reef has the highest rental returns for villas at 7.1% while Al Ghadeer offers the most attractive rental yields in Abu Dhabi at 8.5% for apartments.
In the rental market, Al Reem Island has remained the top choice for tenants looking for apartments, followed by Al Khalidiya. The rents for Al Reem Island apartments have also stayed relatively unchanged with 1 and 2-bedroom flats averaging at AED 63k and AED 90k respectively. Only rents for studios in Al Reem Island have witnessed a decline of 6.1% from AED 49k in the last six months of 2019 to AED 46k in the first six months of 2020.
For villas, affordable neighbourhoods such as Mohammed Bin Zayed City and Khalifa City A have received the most interest from tenants. In the first half of 2020, rents in these areas have remained affordable, reflecting the competitive nature of the market. Rents for 3-bedroom villas in MBZ City have experienced a decline of 6.3% from AED 95k in H2 2019 to AED 89k now, while prices of 4 and 5-bedroom villas have remained consistent at AED 121k and AED 143k respectively.
In the off-plan market, freehold developments in Yas Island, Al Reem Island, Saadiyat Island and Al Maryah Island have continued to garner interest from investors and potential homeowners. Within these neighbourhoods, Yas Acres in Yas Island and Jawaher Saadiyat in Saadiyat Island have been the most popular options for buyers interested in villas and townhouses. For off-plan apartments, investors have been leaning towards off-plan projects such as Shams Abu Dhabi in Al Reem Island, Al Maryah Vista in Al Maryah Island and The Gate in Masdar City.
Haider Ali Khan, CEO of Bayut, commented on the performance of the Abu Dhabi real estate market: “The real estate market in the UAE and the capital in particular, stayed more or less resilient despite the unprecedented challenges created by the COVID-19 pandemic. Thanks to the initial timely response and stimulus measures to support landlords and tenants, the market as a whole was able to bounce back, recover and adapt to the new normal. Similar to the DMT’s reports about the increase in transactions during April to over AED 6 billion, we have observed a corresponding increase in interest on Bayut, with views for properties in Abu Dhabi increasing progressively on a monthly basis. In the last two months alone, the total traffic for listings in Abu Dhabi has come close to 5 million views on Bayut, reflecting the growing interest in the capital’s market. Although inter-emirate travel has not returned to pre-COVID levels, the lack of any mobility restrictions have helped homeseekers to easily move homes and find good investment opportunities in the capital.
As the market matures further, we are likely to see these trends continue with more investors, buyers and tenants taking the step to invest, buy and live in the capital city.”
For further details take a look at the Abu Dhabi Market Report for H1 2020 by Bayut.
