Rents in Abu Dhabi have undergone the sharpest annual increases in the last decade during a boom in the property market, according to a new report by real estate services firm Cushman & Wakefield Core.
The emirate’s rental market registered a 10 per cent annual growth in rents for villas and 16 per cent for apartments, the consultancy research showed.
Villas in Saadiyat Island faced a rental increase of 14 per cent, followed by Yas Acres with 13 per cent and Al Reef Villas with an 8 per cent rise.
In the apartment districts, Yas Island rents had the highest increase at 15 per cent, followed by Saadiyat Island at 14 per cent and Reem Island at 12 per cent.
“Areas like Yas Island are becoming more desirable for tenants, driving rental increases, while established luxury communities like Saadiyat Island are leading rental market growth,” Prathyusha Gurrapu, head of research and consultancy at Cushman & Wakefield Core, said.
“Citywide rents are rising at a faster rate than sales prices, leading to a compression in yields.”
The UAE’s property market continues to rebound strongly from the coronavirus pandemic on the back of government initiatives such as residency permits for those who have retired and remote workers and growth in the non-oil economy.
In the second quarter, Abu Dhabi’s average apartment prices registered a year-on year increase of 6.2 per cent and average villa prices grew by 3.9 per cent, according to real estate consultancy CBRE.
Rents also jumped during the period, with apartment rents rising by 6.6 per cent and average villa rents by 2.5 per cent during the quarter, CBRE said. Average annual apartment and villa rents in Abu Dhabi stood at Dh66,375 and Dh166,261, respectively.
Last month, Abu Dhabi launched the emirate's first residential rental index, aimed at providing indicative rental values in different areas of the emirate.
The rental index, which is available online at the Abu Dhabi Real Estate Centre’s website, highlights rental rates for apartments and villas in Abu Dhabi City, Al Dhafra and Al Ain. The index will be updated every quarter.
Areas like Yas Island are becoming more desirable for tenants, driving rental increases
Prathyusha Gurrapu,
head of research and consultancy, Cushman & Wakefield Core
In citywide residential sales, prices went up 9 per cent year-on-year, according to Cushman & Wakefield Core research.
Villa prices recorded a 10 per cent annual increase, driven by strong demand in luxury areas such as Saadiyat Beach Villas and Yas Acres.
Apartment prices also rose by 8 per cent, with prime districts witnessing significantly higher increases as Saadiyat Island leads the market with a 30 per cent price increase, followed by Yas Island (17 per cent) and Reem Island (9 per cent), the report said.
Yas Island and Al Reem Island are where the major share of new residential handovers took place, according to the study.
Year to date, 2,431 units have been handed over, including 1,315 apartments in Al Raha Beach, Al Maryah Island, and Masdar City, as well as 1,116 villas in Jubail Island, Yas Island, and Saadiyat Reserve.
An additional 1,950 units are anticipated for handover later this year, bringing the total for this year to approximately 4,300 units, with the majority of upcoming deliveries expected in Reem Island and Yas Island.
The off-plan market continues to dominate transactions in Abu Dhabi, but there has been a growing shift to ready properties, the report said.
“Although off-plan transactions still make up a significant portion of total volumes, we have seen a growing shift towards existing properties,” Ms Gurrapu said.
“Ready property transactions increased by 54 per cent compared to the same period in 2023, reflecting a growing share of end-user buyers seeking ready-to-move-in homes.”
On the other hand, off-plan sales transactions saw a decrease of 19 per cent year to date compared to the same period in 2023. This is due to limited launches of new projects and lower launch volumes, the report said.
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Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
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Uefa Champions League Group C
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