Knight Frank reports that valuations have been relatively constant for the past three and a half years, with average prices still 25% below the 2014 peak.
Global real estate company Knight Frank reports that while rents generally are declining, home values in Abu Dhabi’s freehold areas rose by 1.6% in Q2.
In comparison to the same period last year, the total value of transactions in Abu Dhabi increased by 103% to AED 6.1 billion during the second quarter.
The average cost per square foot (psf) has increased to 979 UAE dirhams, up 2.8% from 2022.
Saadiyat Island and Al Reem Island are the two most active sales submarkets in the United Arab Emirates.
Knight Frank claims that average prices are still 25% below the 2014 peak and that values have been essentially stable for the past three and a half years, giving purchasers confidence to upgrade when feasible or switch from renting to buying.
“Home upgrades are driving price growth in certain segments of the market, with more affordable villa locations, such as Al Reef Villas, for example, registering the strongest price growth in the villa market (17%) since early 2020 as buyers take advantage of the opportunity to upgrade from apartments to villas,” said Faisal Durrani, Partner, Head of Research, Middle as well as North Africa.
In contrast to a 0.8% decrease at Saadiyat Island (AED 1,337 psf), prices at Al Reef Villas (AED 686 psf) and Al Raha Gardens (AED 826 psf) have increased by 16.9% and 4.9%, respectively, since January 2020.
“Prices on Saadiyat Island, Abu Dhabi’s most expensive freehold villa submarket, appear to be stabilising again after a near 12-month decline.” At approximately AED 1,300 per square foot, Saadiyat Island still offers exceptional value for the money, especially when compared to other parts of Dubai. However, buyers seem unwilling to commit above a certain price point.”
The market for rentals
Although they are -0.4% less than they were this summer, flat rents have climbed by 0.3% since the first quarter. However, demand for villa lease prices has increased, according to the poll, with the exception of more affordable submarkets like Al Reef Villas and Al Raha Gardens.
The average annual residential lease price in the city is AED 60 psf, according to Knight Frank; this represents a 0.4% increase from the same period previous year.
According to Stephen Flanagan, Partner, Head of Valuation Advisory, Middle East & North Africa, “villas are a star performing subsector in the leasing market, with a notable upswing in lease rates across Abu Dhabi, with the exception of more affordable submarkets, such as Al Reef Villas and Al Raha Gardens, where annual rents stand at AED 42 psf and AED 51.”
