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Abu Dhabi property market continues strong growth

The Abu Dhabi property market continued its strong growth in the last quarter of 2023, with all segments showing a steady increase in value.

The ValuStrat Price Index (VPI) for Abu Dhabi’s residential market has observed an annual increase of 4.2 percent and a quarterly rise of 1 percent. The villa market saw 1.7 percent quarterly and 5.7 percent annual growth, while apartments saw a steady annual increase of 2.7 percent.

The weighted average home value in Q4 was AED9,720 per sq m (AED903 per sq ft). Apartments stood at AED10,495 per sq m (AED975 per sq ft), with villas at AED7,847 per sq m (AED 729 per sq ft).

Saadiyat Island saw the highest annual capital gains during the quarter, as villas rose 12.6 percent. Villas in Al Raha saw growth of 5 percent year-on-year, and Mohammed Bin Zayed City was up 4.2 percent. Hydra Village prices remained stable when compared to the previous year. Best performing apartments were located in Al Muneera Island (up 4.5 percent), Saadiyat Island (4.1 percent), and Al Bandar (4 percent). Al Reef saw little or no change in capital values in 12 months.

Rental gains

Rental values grew as well, with the VPI for annual rental values expanding by 6.4 percent annually and 1 percent quarterly. The villa segment experienced a notable annual rise of 7.5 percent. Meanwhile, apartments reported a year-on-year increase of 5.3 percent, reflecting the continuous demand in the rental market.

“Continued steady price and rental growth during Q4 2023 demonstrates a maturing market in Abu Dhabi’s ready home sales. This is supported mostly by domestic buyers. High demand for off-plan properties has been evident with an increase from foreign investors,” Haider Tuaima, Director and Head of Real Estate Research at ValuStrat, said.

Growing demand

The year 2023 saw the completion of 2,587 apartments, marking 42 percent of the anticipated residential developments. The report highlights a significant uptick in residential prices per square foot, driven largely by the off-plan market, with a quarterly increase of 15.5 percent and an annual surge of 23.1 percent. In the commercial arena, Abu Dhabi’s office sector demonstrated remarkable strength. Average sales price soared by 55 percent quarterly and office asking rents in prime districts escalated by over 11.3 percent quarterly and 13.3 percent annually.

Hospitality shines

The hospitality sector shone brightly, with Average Room Rates (ARR) and Revenue Per Available Room (RevPAR) witnessing year-on-year increases of 23 percent and 26 percent, respectively. Total hotel revenues leapt to AED4.5 billion, a 27 percent increase from the previous year, highlighting the sector’s significant recovery and growth.

For a detailed perspective on the property market, visit: Dubai - Real Estate Review Q4 2023