Abu Dhabi real estate market is expected to see delivery of approximately 7,000 residential units this year compared to 6,000 units in 2021 as the investors and end-users generated demand for the apartments and villas in the emirate.
The real estate consultancy Core’s latest Abu Dhabi’s annual report for 22, said market confidence in Abu Dhabi is considerably high in the wake of a favourable economic environment, revival in tourism numbers, a successful vaccine program, and the recent scaling back of Covid-19 restrictions. However, it said most price recovery was witnessed over the last 12-18 months, with the market expected to be in a steady phase over 2022.
“Continued inward investment with key investment deals and the announcement of full foreign ownership for specific businesses affirms the government’s push to attract more direct foreign investments by promoting an open and flexible business environment and bolstering Abu Dhabi’s position on the global investment map,” David Short MRICS, head of Abu Dhabi at Core, said.
Ata Shobeiry, CEO at Zoom Property, said the progress in Abu Dhabi’s real estate market was modest in 2021 as compared to Dubai. However, 2022 looks more promising in terms of market growth. “Factors such as favourable economic conditions, tourism, and new developments will continue driving the property market. While the issue of over-supply persists in the apartment segment, stability in the rental market is anticipated with the gap between the demand and supply narrowing down,” Shobeiry told Khaleej Times on Monday.
Al Reem Island in demand
Core’s annual report said most of the 6,000 residential units in 2021 were delivered on Al Reem Island, Yas Island and Al Raha Beach areas.
The report further said there is a relative oversupply of apartments due to a large number of handovers on Al Reem Island. However, it remains a preferred apartment district witnessing strong off-plan sales and a growing leisure hub with the expected delivery of Al Reem Mall in 2022.
“The villa market in Abu Dhabi remains relatively undersupplied with limited new deliveries expected in 2022. Prominent apartment projects expected in 2022 are mainly concentrated on Al Reem Island,” David Short said.
Saadiyat Island most popular villa district
Saadiyat Island remains the most popular prime villa district witnessing the highest year-on-year price rises due to its beach-front lifestyle, premium stock, and nearness to a range of amenities.
“While Covid-19 led lifestyle changes and need for larger spaces have helped villa district performance, most recovery happened during Q3-Q4 2020, with city-wide sales prices remaining relatively flat with just a two per cent year-on-year rise for both villas and apartment districts,” David Short said.
Upward rental momentum
The Core report also highlights the rental market also gained upward momentum in 2021, with citywide villa rentals witnessing a marginal one per cent year-on-year rise.
Although, an improvement in performance compared to sharper drops in previous years, city-wide apartment rents saw a two per cent decline due to a relative oversupply, the report said.
“While the shift for villas continues, competitively priced apartments remained popular in central locations. Select new projects with superior built properties on Al Reem Island and in Al Raha Beach, although being offered at above-average market rents, are achieving strong absorption,” David Short said.
“While the recovery is gradual, improvements in rental rates recorded in 2021 are expected to continue in 2022,” he added.
Residential forecast 2022
• Continued success for off-plan residential sales, especially in the prime segment of Al Reem, Saadiyat and Yas Island.
• Occupier preference for larger living spaces to remain, with villa sales and rentals expected to show marginal increases
• Demand for Al Reem Island apartment sales and the rental market is expected to improve due to the upcoming Al Reem Mall. Handover of apartments forecast over 2022 may result in slight downward pressure on apartment rents