Abu Dhabi House Prices Grow 29% Y-o-Y In Q2 2014

Apartment sales prices in Abu Dhabi rose four per cent quarter-to-quarter and 29 per cent since Q2 2013 while villa prices rose just two per cent, according to a report by property consultants Asteco.

Among apartments, prices in areas such as Reef Downtown slowed to two per cent after peaking in Q1, Asteco said. However, prices grew 55 per cent year-on-year as it reached Dhs1,150 during this period in this locality.

Sales price of the standard Saadiyat Beach Villas grew two per cent to reach Dhs5.8 million while three-bedroom units in Hydra Village grew around four per cent to reach Dhs1.3 million.

The capital also saw a rise in off-plan sales as is evident from local developer Aldar’s recent launches, the report noted.

Buyers purchased all of 223 units in Aldar’s Al Hadeel project while the Ansam development sold off units at prices ranging from Dhs1, 540 to Dhs1, 550 per square foot.

Meanwhile, rental rates among apartments and villas ranged up to eight per cent during this period, the report said.

Rental rates for prime two-bedroom apartments in the emirate rose five per cent to reach Dhs200,000 per annum while units in investment areas of Al Raha beach and Saadiyat island also reached the same levels, Asteco added.

For villas, a three-bed property on Abu Dhabi Island can be rented for an average of Dhs190,000 whilst the affordable locations of Hydra Village and Al Reef let for Dhs95,000 and Dhs140,000 per annum respectively.

“Ongoing tenant preference for newer, master planned communities drove demand for apartments in prime developments within investment areas, while affordable villa locations continue to be popular,” said Jerry Oates, general manager, Asteco Abu Dhabi.

“Market sustainability will be further buoyed by Abu Dhabi’s plans to launch its own rental index this year, designed to create a more transparent market for UAE national investors, regulating maximum rental increases.”

Although sales prices in Abu Dhabi saw negligible growth in the first quarter this year, residential rents surged 20 per cent year-on-year during this period.

A report by property consultancy CBRE showed that the removal of a five per cent rent cap has been the key factor for the uptick in rents this year.

In addition, the government’s ruling that required all public sector workers residing outside the emirate to relocate to the capital has also pushed up rents, experts said.