Abu Dhabi Real Estate Boom: Prices Up 30% in Certain Areas

Abu Dhabi’s real estate market is on the rise, with both sale prices and rental yields showing steady growth in 2024. From surging demand in luxury districts to new project announcements, the city’s property sector is heating up across the board. Here’s a look at the key trends shaping Abu Dhabi’s real estate landscape.

Residential Deliveries in 2024

The Abu Dhabi property market is set for an impressive year in terms of residential handovers. A total of 2,431 units were delivered by August 2024, and an additional 1,950 units are expected before the year’s end. This brings the total residential units handed over in 2024 to around 4,300, with major handovers focused on Yas Island and Al Maryah Island.

The mix of properties delivered so far this year includes 1,315 apartments and 1,116 villas, with villas accounting for 46% of total deliveries. These units have been delivered across key areas such as Al Raha Beach, Al Maryah Island, and Masdar City for apartments, while villa handovers occurred primarily in Jubail Island, Yas Island, and Saadiyat Reserve. Notably, the bulk of upcoming deliveries are concentrated in Reem Island and Yas Island.

Steady Growth in Residential Sales Prices

Abu Dhabi’s residential sales prices have seen a 9% year-on-year increase citywide, driven by rising demand in key neighborhoods. However, the villa market has outpaced apartments in terms of price growth, with villa sales prices rising 10%, compared to 8% for apartments.

Certain areas have witnessed even more significant gains. Saadiyat Island, known for its luxury appeal, has seen a staggering 30% increase in apartment prices, highlighting the strong demand for high-end living. Yas Island and Reem Island also experienced notable growth, with apartment prices rising 17% and 9%, respectively. On the villa front, Saadiyat Beach Villas saw prices increase by 11%, while Yas Acres recorded a 7% rise.

Rental Market Surges in 2024

The rental market in Abu Dhabi has also been thriving, with rent prices rising faster than sales prices across the city. Overall, residential rents have increased by 15% year-on-year, with villas and apartments both experiencing solid growth.

Villas have seen a 10% rise in rents, while apartment rents grew by an impressive 16%. Luxury areas like Saadiyat Island led the charge in the villa market, with rents climbing 14%, followed by Yas Acres at 13% and Al Reef Villas at 8%.

In the apartment sector, Yas Island saw the highest rent increase at 15%, with Saadiyat Island and Reem Island following closely behind, with rent hikes of 14% and 12%, respectively. These areas are becoming increasingly desirable for tenants, contributing to the growing demand and rising rental prices.

Yields and New Developments

Despite the rapid rise in rents, apartment yields remain strong at 6.8% gross, outperforming villas, which are yielding 5.1%. This compression of yields reflects the city-wide trend of rental growth outpacing sales prices.

In terms of new developments, the second quarter of 2024 saw several notable project announcements, including the Elie Saab Branded Residences (174 units) by Ohana Real Estate Development in Al Reem Island, Bab Al Qasr Residence 25 by Burtville in Yas Island, Olvera (288 units) by Bloom Properties in Bloom Living, and the Al Fahid Island project by Aldar, which will add approximately 4,000 units to the market. The Al Fahid project, a waterfront development between Yas Island and Saadiyat Island, is expected to play a significant role in the future of Abu Dhabi’s luxury property market.

The Future of Abu Dhabi’s Property Market

As we head toward the end of 2024, the outlook for Abu Dhabi’s property market remains optimistic. The continued delivery of high-end residential units, coupled with rising demand in both the sales and rental markets, will likely keep the market buoyant. Areas like Yas Island, Saadiyat Island, and Reem Island are set to remain prime locations for investors, buyers, and tenants alike, with luxury and waterfront developments leading the charge.

If you’re considering entering Abu Dhabi’s real estate market, whether as an investor or tenant, now might be the perfect time to explore opportunities in this fast-growing city.