Changes in the Abu Dhabi real estate market during the summer period

The Abu Dhabi real estate market is actively developing, as the year 2022 turned out to be a record one in the real estate sector for the emirate. There were 8,553 sales transactions recorded in 2022, compared to 5,539 in 2021, with an increase of 54.4%.

International investors made the majority of transactions in 2022, which was influenced by the unstable global situation. The biggest share of buyers were from Western European countries, such as Germany, France, Italy and Switzerland.

Abu Dhabi remains a politically and economically stable region that aims to attract foreign investments.

As an example, below is a table with the total scope of real estate sales transactions within the emirate:

The number of deals have been increasing for the past two years.

Note! The figures in this article come from the official DARI government statistics, which is Abu Dhabi’s trusted digital real estate ecosystem. You can find them directly at www.dari.ae.

As for property prices, these can vary depending on the neighbourhood. This can be illustrated by different types of real estate in the most sought-after areas of the emirate for the year 2022.

Prices of one-bedroom apartments:

The cost of one-bedroom apartments on Al Reem Island increased throughout the year 2022, however the price of properties in Al Reef decreased, but by the end of the year prices recovered, and still managed to grow. Residences in Al Raha decreased in price by 14% in 2022.

Prices of three-bedroom townhouses:

As for townhouses on Yas Island and in Al Reef, the prices decreased by about 1–1.5% over the year.

Prices of five-bedroom villas:

Prices for five-bedroom villas on Saadiyat Island and Yas Island have increased slightly, while the average price of the same type of residences in Khalifa City has increased by 20%.

These are prices for the Q2 and Q3 2022 for 1–3 bedroom apartments, studios, 2–4 bedroom townhouses and 3–5 bedroom villas, located in some of the most desirable areas in Abu Dhabi.

Prices of apartments

The most requested areas in terms of apartment purchases in Abu Dhabi in 2022 include Al Raha Beach, Al Reef, Al Reem Island, Saadiyat Island and Yas Island.

Note: Apartments are a comfortable option for first-time investors, due to their lower prices and high demand, compared to other types of real estate within the emirate.

Average prices of one-bedroom apartments over Q2 and Q3 2022:

Prices of apartments either increased or remained the same during the summer period, making it a favourable purchase option. The most convenient time for purchasing property is the second quarter, when the cost decreases.

Price statistics for two-bedroom apartments:

Prices of two-bedroom apartments decrease, stay the same, or increase slightly in Q2 and Q3 2022. If you are considering buying a more spacious property, it is better to make a deal in Q3, when the price goes down.

Prices of three-bedroom apartments:

The cost of these types of properties in both quarters is approximately equal, which makes the purchase of three-bedroom apartments in Al Raha Beach, Al Reem Island and Yas Island a profitable investment. Residences in Saadiyat Island dropped in price by AED 780K (USD 212K) during the summer, therefore it is possible to buy three-bedroom apartments in this neighbourhood at a lower price which will be kinder to your budget.

Statistics on average prices for studios:

Studios are available for purchase only in three of the most popular neighbourhoods of Abu Dhabi. If you are interested in this type of real estate investment, it is worth making a deal in Q3, when the price decreases.

If you are considering budget apartment options in Abu Dhabi, then the most suitable neighbourhood is Al Reef. While the most expensive residences are located on Saadiyat Island, however they are still available at a lower price. The best period to buy one-bedroom apartments in this area is during the second quarter, and the lowest prices for three-bedroom apartments can be found in the third quarter.

The most popular areas in terms of townhouse purchases are Al Reef, Yas Island and Al Raha.

Average prices of two-bedroom townhouses in 2022:

Prices of two-bedroom townhouses remain approximately the same during the summer period, therefore it is profitable to purchase the property at any time convenient for you.

Prices of three-bedroom townhouses:

Prices for this type of residence increase slightly from Q2 to Q3 2022, but the raise is less than 1%.

Price statistics for four-bedroom townhouses:

The second and the third quarters indicate similar values for such residences.

Buying a townhouse is a favourable investment during any summer period, as prices decrease slightly or remain the same. The most affordable residences are located in the Al Reef neighbourhood. In Al Raha, it is possible to buy four-bedroom townhouses at the higher cost, and Yas Island offers this type of property within the medium price segment.

Some of the most desirable areas featuring villas for sale include Saadiyat Island, Yas Island and Khalifa City.

Average purchase prices of three-bedroom villas:

The cost of three-bedroom villas in Khalifa City is stable during the summer period. However, the situation is different on Yas Island, where there is a significant decline of the average price by nearly AED 1M (USD 272K). This option would suit investors who want to buy spacious real estate with greater profit.

Price statistics of four-bedroom villas:

A decrease in prices was recorded in the third quarter of 2022. While the difference between Q2 and Q3 on Saadiyat Island and Khalifa City is less than AED 20K (USD 5.4K), and on Yas Island the price drop exceeded AED 900K (USD 270K). The amount of money that was saved from the purchase of a villa can be used to buy an additional apartment in order to rent it out and receive a higher passive income.

Prices of villas with five bedrooms:

Prices of units on Saadiyat Island remain almost constant. The cost of residences on Yas Island decreases again by AED 500K (USD 136K). On the contrary is Khalifa City, as there is an increase of AED 1.9M (USD 517K), therefore, the best time to buy a five-bedroom villa in this area is Q2.

The most expensive villas are offered for sale on Yas Island, while the most affordable ones are in Khalifa City. If you are interested in investing in this type of real estate, the profitable choice is to buy properties on Yas Island in Q3, which allows you to save between AED 500K (USD 316K) and AED 1M (USD 272K). Prices of villas on Saadiyat Island remain stable in summer, just like 3–4 bedroom villas in Khalifa City. However, prices of five-bedroom residences in this area increase dramatically in Q3, which is why it is better to make a deal in Q2.

A long-term investment strategy in Abu Dhabi is to rent out real estate. Foreign nationals from all over the world come to the emirate all year-round and are looking for long term accommodation. Single professionals and couples are more likely to be interested in studios and small apartments which are located in the business districts, and families with children prefer townhouses and villas in areas with a developed infrastructure.

In the event that your priorities change, you will be able to resell your property in Abu Dhabi at a higher price, as prices are increasing every year. The total value of sales transactions in 2022 reached a record level of AED 22.8B (USD 6.2B) compared to AED 15.14B (USD 4.1B) in 2021. The deal value within the market has increased by 50.7%.

Rentals

Below are the most popular freehold areas in Abu Dhabi, where you can rent out apartments, townhouses and villas.

Important! In Abu Dhabi, a foreign citizen can buy real estate with full ownership only in freehold-zones. The investor can manage the freehold property by renting it out, reselling, granting it to someone else or transfer by inheritance.

Reem Island

A neighbourhood with well developed infrastructure, which features high-rise residential and commercial buildings.

Reem Island boasts one of the highest average return on investment (ROI) rates in Abu Dhabi, which attracts investors. Rental rates are moderate compared to the rest of the emirate, making the area popular among tenants looking for apartments to rent.

Al Raha

This is a commercial, residential and entertainment district that is located near Abu Dhabi International Airport.

The neighbourhood has average returns on investment rates, yet one of the highest rental prices for three-bedroom apartments. Four-bedroom townhouses are also available here, which are in high demand among families with children.

Yas Island

The main entertainment centre of the emirate, which is being actively developed.

Yas Island is witnessing an average ROI indicator. The investment yield for villas reaches 8% or more, which was influenced by a sharp decline in prices during the third quarter of 2022 and high rental costs. Yas Island is a family-oriented neighbourhood, therefore spacious residences are more popular here.

Saadiyat Island

The island is being actively developed to include residential properties, hotels, cultural attractions, prestigious educational institutions and sports areas.

The return on investment in Saadiyat Island is the lowest out of all the neighbourhoods listed in the article. This can be explained by the fact that many residential complexes are still under construction. If you are considering buying an off-plan property, then Saadiyat Island is an ideal destination. In the near future it will become the cultural and resort centre of the emirate, and will attract individuals and families for both long-term and short-term rentals.

Al Reef

A mixed-use neighbourhood close to Abu Dhabi International Airport.

Al Reef is the area with the highest profitability for 1 and 2 bedroom apartments, as it is one of the locations that offers the lowest rental prices within the emirate. It also features inexpensive 3 and 4 bedroom townhouses, with an average price that is lower than one-bedroom apartments in some areas. Al Reef will be a comfortable option for first-time buyers with a limited budget.

Khalifa City

The area on the mainland of the emirate with a developed infrastructure, and is mainly represented by private villas.

There is a high return on investment for apartments in Khalifa City, but there are hardly any for sale in the area. However, you may consider buying villas as they offer low rental rates, which attracts families who opt for a comfortable and inexpensive property to live in.

Resale of real estate

Should the investor’s plans change, they can resell the property. In some neighbourhoods, prices increase during the summer. The price of one-bedroom apartments on Yas Island increased by an average of AED 75K (USD 20K) in Q3 2022 compared to Q2, while on Saadiyat Island this went up by AED 200K (USD 54K).

The cost of residences may increase even beyond the summer period. For example, five-bedroom villas in Khalifa City increased in price by AED 1.9M (USD 517K) between Q3 and Q4.

Summer is a good time to invest in Abu Dhabi, as the real estate market remains stable and is constantly growing. Investors can choose different strategies to secure their investments, including purchasing with a view towards long-term rentals and resale at a higher price, etc.