Abu Dhabi real estate booms as more of world’s wealthy flock to UAE capital

Rent prices for budget apartments and villas in Abu Dhabi rose since January 2023, new Bayut report finds

Abu Dhabi’s real estate market is at “one of its best stages ever,” Bayut’s CEO said, attributing the UAE capital’s market boom to an increase in investment activity by high net-worth individuals (HNWIs).

“The much-discussed millionaire migration is a very real factor, with HNWIs from around the globe dedicating significant budgets for investment in UAE real estate,” said CEO of Bayut and Head of Dubizzle Group MENA, Haider Khan.

“For those investors, the lure of Abu Dhabi’s luxurious island communities is obvious. Highly-desired and established locales such as Yas Island and Saadiyat Island, along with upcoming master projects like that of Jubail Island, look set to ensure that investor interest will remain significant for some time yet.

Abu Dhabi real estate

Abu Dhabi’s digital real estate ecosystem, DARI, recorded 2,047 sales transactions for ready properties since January, indicating a growing interest in the emirate’s real estate offerings.

“Whilst investors taking advantage of favourable market conditions is undoubtedly a factor in that high number, it’s also likely that holistic increases across Abu Dhabi’s rental sector are bearing an influence,” Khan said.

Abu Dhabi rent prices recorded an overall increase during this period. Budget apartments and villas’ rent prices rose by 8 percent while luxury properties’ rents rose by 11 percent, the Bayut real estate market report for H1 2023 found.

“It could be that rising rental prices are encouraging tenants to favour purchasing a property over continuing to rent, in order to ensure their money is filtered towards securing an actual long-term asset,” he added.

Affordable properties

Potential buyers seeking affordable apartments have exhibited a preference for popular suburban areas like Al Reef and Al Ghadeer. In terms of villas, however, buyers in this category showed a preference for Al Reef and Khalifa City.

Sales prices for affordable apartments have generally decreased by up to 5 percent, whereas villas have become more expensive by up to 3.42 percent. Prices in the luxury segment have decreased by under 1 percent for villas and increased by up to 4.4 percent for apartments.

Mohammed Bin Zayed City has been the most popular area to rent affordable villas in Abu Dhabi, whereas luxury renters have preferred Al Raha Gardens.

Luxury properties

On the other hand, high net-worth individuals have gravitated towards waterfront communities such as Al Reem Island, Al Raha Beach, Yas Island, and Saadiyat Island. The average price-per-square-foot for these areas has increased by 0.5 percent to 4.4 percent during Q1 2023.

Highly sought-after luxury areas to rent such as Al Raha Beach, Corniche Area, Yas Island, and Saadiyat Island, have gone up by 0.4 to 12.4 percent. 

Article Source: arabianbusiness.com

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