Abu Dhabi Real Estate Market Trends — 2022 Results & 2023 Forecasts

Abu Dhabi is an actively developing emirate which continues to attract tourists, business professionals and investors from all over the globe. A strong economic recovery from the pandemic, Expo 2020 which took place in the UAE from 1 October 2021 to 31 March 2022, as well as the FIFA World Cup 2022 in the nearby Qatar, were the key factors as to why the real estate market of the Emirati capital continues to grow and flourish. In this article we will provide you with the latest news about the property market in Abu Dhabi, including results of the previous 2022 year and forecasts for 2023. We will also look at the most popular areas in the Emirati capital which will help you to understand the whole situation and help in making the right choice when moving to Abu Dhabi or investing in Emirati properties.

Abu Dhabi offers affordable and luxury real estate units which are ideal for investment and living in. According to Bayut’s Abu Dhabi Sales Report 2022, the price for budget sector apartments has increased by 2.71% in comparison to 2021, while the cost for affordable villas decreased by 18%. In terms of the luxury segment, a 13% price increase has been seen in the Abu Dhabi real estate market.

As of Q3 2022, the number of transactions recorded in the emirate has increased by 37.5% compared to 2021, of which 72.1% relate to off-plan projects. A total of 58,290 transactions worth AED 13.3B (USD 3.6B) were recorded by the Department of Municipalities and Transport between January and September 2022, with 3,164 new residential units delivered in Abu Dhabi by September.

Affordable & Luxury Apartments for Sale

The following areas were in the top destinations of 2022 among people looking for budget apartments:

• Al Reef was ranked first among those looking for affordable apartments in Abu Dhabi. The cost of a 1-bedroom apartment in the area is AED 600,000 (USD 163,000). The price per sq. ft in the area was AED 686 (USD 187) in 2022 and is 2.71% higher in comparison to 2021. The ROI constituted 7.77%, which makes the area one of the most attractive in the emirate for rental properties.
• Al Ghadeer was the second most popular choice among buyers of budget apartments, with a price of AED 501,000 (USD 136,0000) for a 1-bedroom unit. The ROI in the area is 7.06%, every sq. ft costs AED 703 (USD 190).
• Baniyas which has an average ROI of 4.75% and a cost of AED 746 (USD 203) per sq.ft also attracted buyers and showed a 2.95% price decrease in accordance with 2021. A 1-bedroom apartment in the area can be purchased for AED 622,000 (USD 169,000).
• Masdar City boasts a high ROI of 7.18%. The price per sq. ft here is AED 1,196 (USD 326). The price of purchasing a 1-bedroom apartment in Masdar City is AED 794,000 (USD 216,000).

Among the most popular areas for ultra-luxury apartments in 2022 were the following areas:

• Al Reem Island boasts an ROI of 6.65%. The area has shown a 1.99% increase in comparison to 2021 and the price for per sq. ft here is AED 1,011 (USD 275). A 1-bedroom luxury apartment in the area can be purchased for AED 834,000 (USD 227,000).
• Al Raha Beach is another premium destination among those who value comfort and privacy. The area has an ROI of 5.88% with an average price per sq. ft of AED 1,226 (USD 330), which is 3.92% higher in comparison with the previous year. The price for an upscale 1-bedroom unit in Al Raha Beach is AED 1,150,000 (USD 313,000).
• Yas Island, which is the entertainment center of the Emirati capital, is in third place with a cost of AED 1,278 (USD 350) per sq. ft, which is 4.18% higher in comparison to the previous year. A 1-bedroom residence here can be purchased for AED 1,030,000 (USD 280,000).
• Saadiyat Island; the cultural hub of Abu Dhabi, boasts a record-breaking 13.19% growth per sq. ft compared to 2021, with a price of AED 1,693 (USD 460). A 1-bedroom premium residence on Saadiyat Island can be bought for AED 2,163,000 (USD 589,000).

Note: More and more people are interested in making a profitable investment in the Abu Dhabi real estate market, as in accordance with the latest visa amendments, becoming the owner of a completed residential property with a cost from AED 2,000,000 (USD 545,000) allows you and your family members to apply for a 10-year Golden Visa. You can find more information about the Emirati visa system in this article.

Affordable & Luxury Villas for Sale

Villas are popular among families as well as among those who value comfort and wish to experience harmonious living in a spacious residence. The following areas are popular among people who wish to purchase an affordable home:

• Al Reef is one of the well-known areas offering budget villas with a price of AED 707 (USD 192) for every sq. ft, which is 4.67% higher than in 2021. A 3-bedroom residence can be obtained from AED 1,588,000 (USD 432,000), which may be a good investment, as the ROI in Al Reef is 6.13%.
• Khalifa City A offers 3-bedroom villas for AED 4,284,000 (USD 1,166,000) with a rental yield of 4.58%. The cost per sq. ft has decreased in comparison to 2021 by 3.05% and constitutes AED 700 (USD 190).
• Hydra Village is one of the most budget-friendly options with AED 496 (USD 135) per sq. ft with a slight increase of 0.69% compared to 2021 prices. A 3-bedroom villa can be obtained for AED 945,000 (USD 257,000), with the ROI for this type of property currently 6.71%.
• Al Ghadeer is known for its budget-friendly apartments and for its affordable villas with an ROI of 5.82%. Thus, a 3-bedroom unit can be purchased for AED 1,413,000 (USD 385,000). The price per sq. ft is AED 726 (USD 198).
• Baniyas saw a significant decrease in prices by 18.07% compared to 2021. The price per sq. ft in the area costs AED 749 (USD 204), and a 3-bedroom unit can be purchased from AED 3,270,000 (USD 890,000).

The following areas are the most popular in terms of upscale villas.

• Saadiyat Island boasts a 12.67% price increase in comparison to 2021 with AED 1,620 (USD 440) per sq. ft. A 4-bedroom premium residence in the area can be purchased for AED 7,802,000 (USD 2,124,000), while a more spacious 6-bedroom unit will cost AED 18,302,000 (USD 4,983,000). The Saadiyat Island area has an ROI of 4.62%. Among the most desirable districts on the island at the moment are Saadiyat Beach and Jawaher Saadiyat.
• Yas Island offers various types of villas with an average cost of AED 1,144 (USD 310) per sq. ft, which is 6.06% higher than in the previous year. A 4-bedroom residence can be purchased for AED 5,844,000 (USD 1,591,000). The ROI in the area is 5.04%.
• Al Raha Gardens is another desirable destination among those looking for an ultra-luxury home with an average price of AED 2,886,000 (USD 786,000). The ROI is 6.04% and the cost per sq. ft is AED 834 (USD 227), which is 0.49% lower than the previous year.

Note: Saadiyat Island will become home to world-class museums once the area is completed. At the moment, Louvre Abu Dhabi is located there, and in the coming years, Guggenheim Abu Dhabi, which is an art museum that plans to become the largest of the Guggenheim museums, as well as Zayed National Museum, showing the culture, historic and economic transformation of the UAE, will appear on the territory of the island.

In 2022 there was a high demand for spacious homes which led to a growth of villa rental prices. In terms of budget villas, a 12% increase was seen, while prices for luxury residences have grown by 29%. As for apartments, a 9% and 15% decrease was seen for affordable and upscale properties, according to Bayut’s Abu Dhabi Rental Market Report 2022. The average rental price per sq ft is AED 59 (USD 16).

Affordable & Luxury Apartments to Rent

• The most popular areas among tenants wishing to rent a budget apartment are the following:Khalifa City A offers a 1-bedroom apartment to rent for an average of AED 42,000 (USD 11,000) per year, while a studio can be rented for just AED 28,000 (USD 8,000). These prices haven’t changed since 2021.
  Al Khalidiyah has seen a 6.12% decrease in rental prices compared to 2021 in terms of studios which has a current rental price of AED 29,000 (USD 8,000) per year. A 1-bedroom affordable apartment can be rented for AED 52,000 (USD 14,000) which is a price increase of 0.98%.
• Hamdan Street, which is popular among those wishing to live in the heart of Abu Dhabi, offers 1-bedroom apartments for AED 43,000 (USD 12,000) per annum, which is 2.6% less than in 2021.
• Al Muroor has seen a 5.34% decrease in rental prices for 1-bedroom units. The average price of this type of property is AED 39,000 (USD 11,000) per year. Rental prices for studios in Al Muroor fell by 8.49% to AED 30,000 (USD 8,000).

In terms of high-end apartments, among the most popular areas were:

• Al Reem Island became the most preferred area among tenants looking for upscale apartments, with a 1-bedroom apartment being rented for AED 59,000 (USD 16,000).
• Al Raha Beach offers 1-bedroom units for an average of AED 66,000 (USD 18,000) per year, which is 14.47% lower compared to 2021.
• Corniche Area has the same prices as 2021, with a 1-bedroom premium apartment being rented from AED 75,000 (USD 20,000). If you want a more spacious unit, a 3-bedroom residence will cost you AED 119,000 (USD 32,000) per year.
• Yas Island has seen a significant decrease in terms of luxury apartments. Thus, a 1-bedroom unit will cost AED 61,000 (USD 17,000) per year, which is 9.7% lower than in 2021, while a 2-bedroom property will cost AED 97,000 (USD 26,000).

Note: Yas Island is known for its world-class entertainment venues which include Yas Marina Circuit, Yas Waterworld, Ferrari World, Warner Bros. World, as well as Yas Mall. Moreover, the island is known for its first-class dining options and its beautifully landscaped beaches. You can read more information about Yas Island in this article.

Affordable & Luxury Villas to Rent

Budget villas are not only a good place for living, but also an ideal investment tool, as since the pandemic, more and more people prefer living in a more spacious unit, and villas in Abu Dhabi are always in high demand among tenants. Among the most popular areas with affordable villas are the following:

• Mohammed Bin Zayed City has seen a 7.36% decrease in the average rental price for a 3-bedroom villa which can be rented for AED 93,000 (USD 25,000) per year, while rental prices for 4-bedroom villas in the area haven’t changed since 2021 and have remained at AED 128,000 (USD 35,000).
• Khalifa City A offers 3-bedroom units for AED 134,000 (USD 36,000), which is 1.22% higher in comparison to 2021. A 4-bedroom villa can be rented for AED 148,000 (USD 40,000), which is 2.12% lower than in 2021..
• Shakhbout City, also known as Khalifa City B, has seen an increase in the prices for villas. As a result, renting a 3-bedroom unit has become 4.55% more expensive than in 2021, with an average price of AED 115,000 (USD 31,000). A 4-bedroom villa in the area can be rented for AED 133,000 (USD 36,000) which is 0.81% higher than in the previous year.
• Al Shamkha South has seen a significant increase of 12% in terms of 3-bedroom villas, which can be rented for AED 118,000 (USD 32,000) annually. However, there was a decrease in more spacious 4-bedroom residences by 6.26%, reaching AED 131,000 (USD 36,000) per year.

High-end villas are chosen by those who value their privacy and wish to experience a convenient lifestyle with access to private amenities. The following areas were in the top in 2022:

• Al Mushrif saw a 10.97% growth in 2022 rental prices for 4-bedroom luxury villas, with an average price of AED 180,000 (USD 49,000) per year, while a 6-bedroom villa can be rented for AED 218,000 (USD 59,000) which is 9.95% higher than in the previous year.
• Al Raha Gardens showed a significant increase by 10.37%, reaching a rental cost of AED 179,000 (USD 49,000) for a 4-bedroom villa.
• Al Bateen has seen 2.03% increase in 4-bedroom residences and a 7.34% growth in the terms of 5-bedroom villas, reaching AED 226,000 (USD 61,000) and AED 214,000 (USD 58,000) respectively.
• Yas Island offers 4-bedroom luxury villas to rent for AED 286,000 (USD 78,000), which is 8.74% higher than 2021. However, a 6.61% decrease was seen in terms of 5-bedroom units, reaching a price of AED 299,000 (USD 81,000).
• Al Raha Beach rental prices haven’t changed much considering that 4-bedroom units cost AED 261,000 (USD 71,000) to rent, which is 0.54% higher than in 2021. However, in terms of 5-bedroom luxury residences there was an immersive increase of 28.6% reaching AED 353,000 (USD 96,000) per year.

Abu Dhabi real estate market has shown a steady growth in 2022, and the success should continue due to the interest of foreigners in the UAE, in particular, the Emirati capital. The emirate and the UAE government attracts business professionals and investors from all over the world. Demand for real estate in the capital will continue among foreign nationals, particularly those from European and Asian countries, due to the new visa policy, including the 10-year Golden Visa, the favourable geopolitical situation and the UAE’s economic climate.

There is no doubt that areas such as Saadiyat Island and Yas Island will continue being among the most desirable destinations among tenants and buyers, which can be explained by the developed social infrastructure and a range of entertainment and leisure activities located on the territory of these areas. Saadiyat Grove by Aldar Properties will have several new phases that will be launched, whilst the beginning of 2023 has already been signified by the launch of The Sustainable City Yas Island by Aldar Properties and Diamond Developers.

Jubail Island by Jubail Island Investment Company is one of the developing areas, which will continue to attract foreign investors and people wishing to purchase a property within close proximity to key areas of Abu Dhabi. It’s planned that the island will become home to 5,000 residents, and the first villas will be available in Q4 2023. Residents of the development will benefit from open spaces and parks, sports facilities, a marina, a yacht club and much more to come. Moreover, developers such as Bloom Holding, Reportage, Webridge, Q Holdings and Barakah all plan to launch new projects in the current year of 2023.

Last year saw the launch of a large number of new upscale projects from the emirate’s most trusted developers, including Yas Park Gate, Grove Museum Views, Reem Hills, Yas Golf Collection, Sunset Valley and others. New phases are expected to be announced in many of these complexes, which will also be a great option for investment.

Metropolitan Capital Real Estate brokers are always ready to provide you with the latest information regarding the real estate market of the Emirati capital, as well as help you choose a unit corresponding to your needs and preferences. We are official representatives of the largest developers of the UAE, including Aldar Properties and IMKAN and understand everything about the real estate market in Abu Dhabi. If you wish to purchase a property in the Emirati capital, our professionals will lead you until the end of the transaction, prepare all the documents required and help in getting a mortgage in one of the local banks, if necessary. We also provide property management services to investors who purchase properties in order to generate a stable passive income.