The latest Abu Dhabi 2nd quarter real estate review report from ValuStrat, a globally recognised consultancy specialising in multi-sector advisory services, has revealed insightful dynamics in Abu Dhabi’s property market. The report comprehensively analyses the residential, commercial, and hospitality sectors, underscores a market showing robust growth and market activity.
Haider Tuaima, Director and Head of Real Estate Research, shares his synopsis of Abu Dhabi’s real estate market. He and his research team said Abu Dhabi's real estate market demonstrated gradual and consistent expansion across most fronts. The office rental sector experienced strong growth, whilst villas continued to outpace apartments in performance. The residential ValuStrat Price Index (VPI) expanded by 1.3% quarterly and 4.4% annually, reaching 118.7 points compared to the 100 base points at the start of 2021. Despite this growth, residential ticket sizes and off-plan sales experienced a decline on average.
Villa prices increased by 2.2% QoQ and 7.3% annually, reaching 125.5 points. The apartment segment stabilised with marginal capital gains of 0.4% QoQ and 1.4% YoY, reaching 112.3 points.
The VPI for rental values saw steady growth, increasing by 4.4% annually and 1% quarterly to reach 112.1 points, compared to 100 points in Q1 2021. Villa rental values rose to 118.3 points with a 5.7% annual increase and a 0.8% quarterly increase. Apartment rentals registered 106.7 points, up 3.2% YoY and 1.2% QoQ. Gross yields averaged 7.3%, with apartments at 7.8% and villas at 6.2%. The average residential occupancy rate stood at 91.6%.
The average ticket size of off-plan homes fell by 18.4% annually. Off-plan transaction volume, representing 56.8% of overall sales, declined by 34.1% QoQ and 41% YoY, owing to fewer project launches this year. The average ticket size of ready homes decreased by 2.7% annually to AED 2.3 million. However, transaction volume for ready properties grew by 9.4% QoQ and 44.1% YoY.
Office asking rents in primary commercial districts grew by 9.1% quarterly and 13.7% annually. Average occupancy among buildings in the city’s central business districts stood at 88.7%.
He concludes that Abu Dhabi's real estate market showed robust growth and stability in key areas despite some declines in off-plan sales and residential ticket sizes. The overall expansion reflects a healthy and resilient market, with strong performance in both residential and commercial sectors. The steady increase in rental values and transaction volumes for ready properties indicates a sustained demand and investor confidence in Abu Dhabi’s real estate market.
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ValuStrat is an international consulting group that provides advisory, valuation, research, transaction advisory, due diligence, and industrial consulting services, working across various industry sectors. With 45+ years of experience, a network of 13 offices in 5 countries and a client base of 1,000 corporations across the Middle East, UK, Europe and Africa, ValuStrat assists diverse clients, from governments, multinationals, large local corporations and financial institutions to startups, SMEs and family businesses. For Valuation services, it is the preferred service provider to over 120 financial institutions across the EMEA region.
For a detailed perspective on the property market, visit: Abu Dhabi - Real Estate Review Q2 2024
