Bayut Reports High ROI and Growing Investment in Abu Dhabi’s Property Market in Q3 2024

Bayut, the leading property portal in the UAE, has released its Q3 market report for Abu Dhabi where search trends point to a strong performance in both the capital’s affordable and luxury segments. The report comprehensively analyses the relationship between economic variables and demographic trends, which have been instrumental in shaping the city’s real estate landscape.

Trends for Buying Properties in Abu Dhabi

• During Q3 2024, Al Reef, Al Ghadeer and Masdar City emerged as key locations among those looking at purchasing affordable apartments in Abu Dhabi. For those interested in buying luxury apartments, Al Reem Island, Al Raha Beach and Yas Island have remained popular options.

• Villas for sale in Al Reef, Khalifa City and Al Shamkha have garnered the most investor interest in the affordable segment. The luxury villa market has continued to attract buyers, with Yas Island, Al Raha Gardens and Saadiyat Island taking the lead.

• As per Bayut’s data, the average prices-per-square-foot for affordable apartments have mainly experienced minor upticks of over 2%.

• Sustained demand for luxury apartments, particularly in prime locations, has been the key driver behind price hikes of up to 8%. The highest price increase has been recorded for apartments in Saadiyat Island.

• The sales market for affordable villas has witnessed a steady price increase, reaching up to 6%. The average price per square foot for Khalifa City villas rose by up to 5.65%, reflecting growing demand for affordable houses as more buyers entered this market segment seeking spacious, value-for-money properties.

• Prices for luxury villas have continued to appreciate, with the average price per square foot climbing steadily up to 5% in the third quarter of 2024. Enjoying proximity to attractions like SeaWorld Abu Dhabi, Yas Marina Circuit and Ferrari World, opulent villas in Yas Island saw the highest jump in average price per square foot, i.e. 4.94%.

Return on Investment (ROI) Trends for Properties for Sale in Abu Dhabi

• Al Reef and Al Ghadeer reported the highest yields for affordable apartments, offering returns of 8.86% and 8.20%, respectively.
• Investors and HNWIs should note that luxury apartments have enjoyed up to 7.22% and 6.99% returns for premium properties in Yas Island and Al Reem Island.
• In the affordable segment, villas in Hydra Village generated attractive yields of 8.06%. On the other hand, affordable villas in Abu Dhabi Gate City offered 6.69% returns.
• Yas Island was the most desirable location for luxury villas, with an ROI of 6.50%, closely followed by Al Raha Gardens, which offered a 6.42% ROI.

Popular Off-Plan Projects in Abu Dhabi

The off-plan property market in Abu Dhabi continues to thrive, with several projects capturing the interest of both investors and homebuyers across affordable and luxury segments.

The following projects have emerged as top choices during the third quarter of 2024:

Apartments:

Affordable Segment: Royal Park in Masdar City has stood out as one of the most searched for options for affordable apartment buyers, offering a blend of modern living at competitive prices. Its strategic location and convenient payment plans make it highly attractive to first-time buyers and investors seeking long-term value, instilling confidence in their investment decisions.

Luxury Segment: City of Lights in Al Reem Island has remained the top pick for luxury apartment buyers, combining state-of-the-art architecture, waterfront views and high-end amenities. Its premium location and lavish lifestyle appeal to investors seeking upscale urban living, promising a luxurious and rewarding investment experience.

Villas:

Affordable Segment: In the affordable villa market, Bloom Living has garnered high search volume, perhaps thanks to its family-friendly environment, ample green spaces and a range of villa sizes that cater to different buyer needs. The development’s community-centric design continues to attract significant interest.

Luxury Segment: Saadiyat Lagoons in Saadiyat Island is the standout project for luxury villa buyers, known for its breathtaking landscapes, exclusive waterfront properties and proximity to cultural landmarks. This prestigious development continues to be a magnet for those seeking a luxurious and serene lifestyle.

Trends for Renting Properties in Abu Dhabi

The Abu Dhabi residential property market has experienced notable shifts in rental trends across both affordable and luxury segments during the third quarter of 2024.

Apartments:

Affordable Segment: Bayut’s analysis for the Abu Dhabi rental market has shown that tenant interest was mainly focused on Khalifa City, Al Khalidiya and Al Shamkha for affordable apartments during Q3 2024. While rental costs across popular districts recorded upticks of up to 15%, it was 1 and 2-bedroom flats in Al Khalidiya and 2-bed units in Tourist Club area that reported the most noticeable price movements, following a surge in demand. 

Luxury Segment: Tenants interested in luxury apartments have mostly gravitated towards the available inventory in Al Reem Island, Al Raha Beach and the Corniche Area.  Rents for luxury apartments in Abu Dhabi’s popular neighbourhoods have generally increased by 2% to 11%, with the most noticeable price hikes reported for 1 and 2-bed apartments in Saadiyat Island.

Villas:

Affordable Segment: For affordable villas in the UAE capital, tenants have shown an inclination for areas like Mohammed Bin Zayed City, Khalifa City and Madinat Al Riyadh. Rental costs for budget villas in popular areas have slightly increased by under 5%, with certain units in Khalifa City, Madinat Al Riyadh, Shakhbout City and Al Reef reporting price decreases of up to 9%.

Luxury Segment: Tenants keen on luxury villas have generated a high search volume for units in Yas Island, Al Raha Gardens and Al Mushrif. Upscale houses in general have seen decreases of up to 8% in rental costs. The most prominent price decrease was noticed in the rental cost of 6-bed units in Al Karamah. On the flip side, the 6-bedroom villas in Al Mushrif have revealed an uptick of 12.4%, suggesting heightened interest from high-net-worth individuals and investors looking for exclusive, spacious luxury properties.

As 2024 draws to its final quarter, Abu Dhabi’s residential property market remains strong, showing no signs of slowing down. The combination of ongoing government support, continuous infrastructure development and a steady influx of foreign investment points to a bright outlook for both investors and homeowners in the years ahead.

Commenting on the findings, Haider Ali Khan, CEO of Bayut and Head of Dubizzle Group MENA, said:

“The Abu Dhabi real estate market is continuing to stay strong this year, thanks to increased transparency and solid investments from both local and international players. If we look at just the last quarter, we have had over 3.5 million visits on our platform for listings in Abu Dhabi, showing just how strong the demand for properties in the capital is even during summer months. The government’s efforts to enhance data accessibility and push forward digital initiatives, like AI-powered services and the comprehensive DARI real estate platform, have definitely contributed to this.

Looking to the future, we can anticipate even better outcomes. The Abu Dhabi Real Estate Centre (ADREC) is set to attract more foreign investments by streamlining regulations and maintaining a strong focus on transparency. By embracing global standards and leveraging trends like smart city projects and sustainability, Abu Dhabi is positioned for even more growth in its real estate sector.”

Note to Editor: For an accurate representation of price changes, this report compares the average price-per-square-foot in an area to analyse sales trends for villas and apartments in Q2 2024 to those observed in Q3 2024. These prices are, however, subject to change based on the building, amenities, developer and other deciding factors. The report compares the average cost for individual unit types for rental properties between the two periods in popular Abu Dhabi neighbourhoods.

Last Updated on 2 months by News Desk 1