Findings from the Bayut H1 Property Market Report 2023 saw an eventful real estate performance over the period with rising rents contributing to a sales boom in the UAE capital.
According to the report, sales prices for affordable apartments generally decreased by up to 5%, whereas villas became more expensive, rising by 3.42%. Prices in the luxury segment decreased by under 1% for villas and increased up to 4.4% for apartments.
In terms of rental yields, Al Reef recorded the highest projected ROI of 8.04% for affordable apartments in H1 2023, along with the highest ROI of 6.05% for budget-friendly villas, while Al Reem Island offered yields of 6.70% in the luxury segment.
Prospective buyers seeking affordable apartments exhibited a preference for suburban areas such as Al Reef, Al Ghadeer and Masdar City.
Al Reef emerged as the most popular choice in the affordable apartments segment for investors, with the average price-per-square-foot for apartments in the community recording a decline of 2.57%, to stand at 655 dirhams ($ 178.3) in H1 2023.
Al Ghadeer also appealed to budget-conscious investors, with the average price-per-square-foot for apartments in the community increasing slightly to average at AED 715.
Apartments in Masdar City and Baniyas also drew traction from small-ticket investors. While sales-price-per-square-foot in Masdar City reported a 4.88% decline, the prices in Baniyas increased by 0.14%.
In terms of villas, those on a budget showed preference for Al Reef once again, with Khalifa City, Al Samha, Mohammed Bin Zayed City and Al Ghadeer rounding up the top five.
The average sales price-per-square-foot for villas in Al Reef experienced a slight increase of 1.52% during H1 2023, going from AED 704 in H2 2022 to AED 715 in H1 2023.
In the rental market, tenants in pursuit of affordable apartments showed a keen interest in communities such as Khalifa City, where the average rent for studios and two-bedroom apartments remained unchanged over the same period last year, whereas the cost of one-bedroom flats increased by 1.44% from H2 2022. The asking rent for studios in Khalifa City averaged AED 28,000, whereas the cost of one and two-bed flats stood at AED 42,000 and AED 61000, respectively.
In terms of villa rentals, Mohammed Bin Zayed City emerged as the most popular area to rent affordable villas in Abu Dhabi. The average rents for three-bedroom houses in MBZ City increased by 6.15% to average AED 96,000, whereas the cost of four-bedroom villas appreciated by a minor 1.51% to average AED 128,000.
The real estate rally in Abu Dhabi in the first half of the year continues from a strong performance in 2022, which saw the value of real estate transactions rise by 8.5% over the previous year, according to figures released by the emirate’s Department of Municipalities and Transport (DMT) in March. Last year, UAE capital’s real estate market recorded 19,033 transactions, reaching a total value of AED 77.6 billion.
