Rents across the city are increasing more quickly than sales prices, according to a Cushman & Wakefield Core research.
A recent analysis by real estate services company Cushman & Wakefield Core claims that during a boom in the property market, rents in Abu Dhabi have experienced the biggest yearly rise in the previous ten years.
According to consulting research, the emirate’s rental market saw an annual gain in rents of 10% for villas and 16% for apartments.
The rental increases for villas on Saadiyat Island, Yas Acres & Al Reef Villas were 14%, 13% & 8% respectively.
Yas Island saw the largest increase in rents (15%) among the apartment districts, followed by Saadiyat Island (14%), and Reem Island (12%).
According to Prathyusha Gurrapu, head of research and consulting at Cushman & Wakefield Core, “established luxury communities like Saadiyat Island are leading rental market growth, while areas like Yas Island are becoming more desirable for tenants, driving rental increases.”
“Yields are compressing as a result of citywide rents increasing more quickly than sales prices.”
The United Arab Emirates property market is continuing to rebound strongly from the coronavirus outbreak, largely because of government initiatives such as allowing retired people and remote workers to reside there and growing the other sectors than oil.
According to real estate consulting firm CBRE, average apartment prices in Abu Dhabi increased by 6.2% year over year in the second quarter, while average villa prices increased by 3.9%.
Additionally, rentals increased throughout that time. According to CBRE, average villa rents increased by 2.5% and apartment rents increased by 6.6%. In Abu Dhabi, the average yearly rent for an apartment was Dh66,375, and for a villa, Dh166,261.
With the intention of providing indicative rental values throughout the emirate, Abu Dhabi unveiled the first residential rental index for the region last month.
The rental index showcases rental prices for apartments and villas in Abu Dhabi City, Al Dhafra, and Al Ain. It may be accessed online at the Abu Dhabi Real Estate Centre website. Every quarter, the index will be updated.
Tenant demand is increasing in places like Yas Island, which is causing rental prices to rise, as mentioned by
head of research and consulting at Cushman & Wakefield Core, Prathyusha Gurrapu
Prices in home sales throughout the city increased by 9% year over year, as per Cushman & Wakefield Core data.
A 10% annual increase in villa prices was observed, primarily due to high demand in upscale neighborhoods like Saadiyat Beach Villas and Yas Acres.
According to the survey, apartment prices increased by 8% as well, with desirable districts experiencing far larger rises. Saadiyat Island led the market with a 30% price increase, followed by Yas Island (17%) and Reem Island (9%).
The survey found that the majority of new residential handovers occurred on Yas Island and Al Reem Island.
2,431 units have been handed over so far this year, comprising 1,315 apartments in Masdar City, Al Raha Beach, and Al Maryah Island, and 1,116 villas in Jubail Island, Yas Island, and Saadiyat Reserve.
The remaining 1,950 units are planned to be delivered later this year, increasing the total to about 4,300 units. Reem Island and Yas Island are expected to get the majority of the next deliveries.
Although ready houses are increasingly becoming more popular, the off-plan market still accounts for the majority of purchases in Abu Dhabi, according to the survey.
Even though off-plan transactions still account for a sizable share of total volumes, we have observed a rising shift towards existing properties, Ms. Gurrapu said.
“Ready property transactions rose by 54% over the same period in 2023, indicating an increasing proportion of end-user buyers looking for properties that are ready to move into.”
On the other hand, compared to the same period in 2023, off-plan sales transactions have decreased by 19% year to date. According to the research, this is because there have been fewer new project launches and fewer launch volumes.
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