The Bayut H1 Property Market Report 2023 provides insights into the real estate performance in Abu Dhabi during the first half of the year. The report highlights significant increases in rents, leading to a surge in property sales in the UAE capital. Affordable apartment sales prices experienced a decline, while villas became more costly. Al Reef displayed the highest rental yields for affordable apartments and budget-friendly villas, while Al Reem Island offered high yields in the luxury segment. Suburban locations like Al Reef, Al Ghadeer, and Masdar City attracted budget-conscious investors. Khalifa City stood out for affordable villa rentals, while Mohammed Bin Zayed City was popular for villa rentals.
The Bayut H1 Property Market Report 2023 revealed a dynamic real estate performance during the period, with rents increasing significantly and leading to a surge in property sales in the UAE capital. As per the report, affordable apartment sales prices experienced a general decline of around 5%, whereas villas became more costly, showing a rise of 3.42%. In the luxury segment, villa prices slightly dropped by less than 1%, while apartment prices increased by up to 4.4%.
Regarding rental yields, Al Reef displayed the highest projected return on investment (ROI) at 8.04% for affordable apartments in H1 2023, and it also provided the highest ROI of 6.05% for budget-friendly villas. In the luxury segment, Al Reem Island offered yields of 6.70%.
Prospective buyers searching for affordable apartments showed a preference for suburban locations like Al Reef, Al Ghadeer, and Masdar City. Among these, Al Reef stood out as the top choice for investors interested in affordable apartments, as the average price-per-square-foot for apartments in this community decreased by 2.57% during H1 2023, reaching 655 dirhams ($178.3). Al Ghadeer also attracted budget-conscious investors, with the average price-per-square-foot for apartments in the area experiencing a slight increase, averaging at AED 715.
In addition, apartments in Masdar City and Baniyas garnered interest from small-ticket investors. Sales price-per-square-foot in Masdar City saw a decline of 4.88%, indicating a potentially attractive opportunity for buyers. The prices in Baniyas witnessed a marginal uptick of 0.14%. As for budget-conscious villa buyers, Al Reef remained their preferred choice once again, followed by Khalifa City, Al Samha, Mohammed Bin Zayed City, and Al Ghadeer making up the top five options. Regarding villas, the average sales price-per-square-foot in Al Reef saw a slight increase of 1.52% during the first half of 2023, rising from AED 704 in the second half of 2022 to AED 715 in the first half of 2023.
In the rental market, tenants seeking affordable apartments expressed significant interest in communities such as Khalifa City. The rental prices for studios and two-bedroom apartments remained unchanged compared to the same period last year, while one-bedroom flats experienced a 1.44% increase from H2 2022. In Khalifa City, studios had an average rent of AED 28,000, while one-bedroom and two-bedroom flats were priced at AED 42,000 and AED 61,000, respectively.
When it comes to villa rentals, Mohammed Bin Zayed City (MBZ City) stood out as the most popular area for affordable villas in Abu Dhabi. The average rents for three-bedroom houses in MBZ City rose by 6.15%, reaching an average of AED 96,000, while four-bedroom villas saw a minor appreciation of 1.51% to an average of AED 128,000.
The real estate market In Abu Dhabi maintained its momentum in the first half of the year, building on a strong performance in 2022, which witnessed a rise in the value of real estate transactions. According to data released by the Department of Municipalities and Transport (DMT) in March, there was an 8.5% increase in the value of real estate transactions compared to the previous year. In the UAE capital, the real estate market saw a total of 19,033 transactions in the last year, reaching a combined value of AED 77.6 billion.
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