A. SREENIVASA REDDY (ABU DHABI)
Average property prices and rental prices continued to see steady growth during the third quarter of 2024, according to a report by ValuStrat, a reputed real estate agency.
Home prices surged 1.7% quarterly and 5.3% annually, and rents saw an annual rise of 5.8% and a quarterly rise of 2.6%, according to the Q3 report on the Abu Dhabi real estate market by the agency.
Villa rents were up 5.7% year on year (YoY) and 2.7% quarter on quarter (QoQ), whereas apartments rose 6% YoY and 2.4% QoQ. Gross yields averaged 7.5%, with apartments at 7.9% and villas at 6.5%, attesting to the attractive returns on real estate investments in Abu Dhabi. The average occupancy rate was 85.7%.
Apartment asking rents in Abu Dhabi City averaged Dh106,000 per annum The highest rental growth every quarter was observed in Al Bandar (5.3%) and Saadiyat Island (2.8%). Al Reef and Al Muneera saw rents stabilise on a quarterly basis. The average annual apartment asking rent for studios is Dh55,000, 1-bed Dh81,000, 2-beds Dh118,000 and 3-beds Dh171,000.
Villa asking rents averaged Dh240,000 per annum. Villa rents grew the highest in Saadiyat Island (3.7%) and Al Raha (3.4%). Al Reef witnessed a 1.5% reduction in asking rentals, while Mohammed Bin Zayed City saw rents stabilise. Annual rents for 3-beds were Dh176,000, 4-beds Dh238,000 and 5-beds Dh306,000.
Home prices in Abu Dhabi grew faster in Q3 than in the previous quarter. Villa prices were up 2.2% QoQ, and 8.2% annually while apartment prices rose 1% QoQ and 2.2% YoY.
The weighted average home value during the last quarter was Dh922 per square foot, and for apartments, it stood at Dh991 per square foot, and for villas, it is at Dh755 per square foot.
According to the ValuStrat report, Saadiyat Island saw the highest annual capital gains this quarter, as villas rose 19.9%. Villas in Al Raha saw growth of 7.5% YoY, and Mohammed Bin Zayed City up 3.5% YoY. House prices in Hydra Village and Al Reef remained stable compared to last year. Best performing apartments in terms of annual capital gains were located in Al Reef (4.9%), Saadiyat Island (4.5%), and Al Muneera (3.6%).
Commenting on the report, Haider Tuaima, Director and Head of Real Estate Research at ValuStrat, said: “The consistent growth across residential, office, industrial, and hospitality sectors underscores Abu Dhabi’s mature and stable market conditions, solidifying its competitive position within the UAE’s real estate landscape,”
A total of 1,442 apartments and 593 villas were completed during the first three quarters of 2024, according to the ValuStrat report. The completed residential units represent 22.8% of the expected residential pipeline for 2024. A total of 8,907 residential units are expected to be completed by the end of 2024.
According to the report, the average price of ready homes averaged Dh1,069 per square foot, increasing by 6.4% yearly but falling by 3.6% quarterly. Transaction volume for ready properties grew 18.9% QoQ and 51.1% YoY.
The average price for off-plan properties stood at Dh1,708 per square foot, showing an increase of 32.5% quarterly and 33% annually. Abu Dhabi off-plan transaction volume, which represented 41.2% of overall sales, declined 36.7% QoQ and 58.6% YoY, owing to fewer project launches this year.
In the third quarter of 2024, the Abu Dhabi real estate market witnessed 2,594 mortgage transactions across all asset classes compared to 1,495 cash transactions of ready properties. The total sales value attributed to mortgage transactions stood at Dh3.5 billion, with cash transactions totalling Dh4.2 billion.
During the third quarter, the city’s estimated office stock stood at 3.9 million square metres of Gross Leasable Area (GLA). Office asking rents in primary commercial districts within the city grew by 8.3% quarterly and 25.6% annually. Average occupancy among buildings within the city’s central business districts stood at 90.2%.
In the third quarter, shopping centre stock stood at 1.95 million square metre GLA. Al Futtaim IKEA expands in Abu Dhabi with a second small store format at Dalma Mall covering an expansive area of 4,645 square metre.
Abu Dhabi city’s total hospitality stock at 34,000 hotel rooms and hotel apartments. According to the Department of Culture and Tourism, the emirate aims to boost the number of hotel rooms to 52,000, from the current 34,000, to support the Abu Dhabi Tourism Strategy 2030.
Industrial property asking prices in Abu Dhabi have also seen an uptick during the last quarter, with prices at the higher end of the spectrum rising by 2.7% in both Mussafah and ICAD. However, prices have remained stable at the lower end.