An Open House at Fairmont Marina Residences
An Open House in Radiant Square, Al Reem Island
The price of villas in Abu Dhabi has increased by almost 6 %, although it is still 25 % below its peak, which was witnessed in 2014.
The key factors that have influenced buyers’ demand are market stability and lower costs compared to recent peaks. The price of villas has remained the same for three and a half years, resulting in more and more tenants deciding to buy property or upgrade if possible.
Cost of villas in Abu Dhabi neighbourhoods
In Q2 2023, residential real estate prices in Abu Dhabi’s freehold zones increased by 1.6 %. This caused the average price to reach AED 10.5K (USD 2.8K) per 11 sq. ft, which is 2.8 % more than in 2022.
There was an increase in prices in the affordable and mid-range segments. This is most noticeable in Al Reef Villas and Al Raha Gardens, where the growth has reached almost 17 % and 5 %, respectively, since January 2020. This demand can be explained by the desire to move from apartments to private villas.
Residences on Saadiyat Island turned out to be the most expensive among the submarkets of Abu Dhabi, where the cost of real estate exceeds the average family income by 20 times. The price-to-quality ratio in this area maintains an optimal level: almost AED 14K (USD 3.8K) per 11 sq. ft.
Al Reem Island became the most active area of the emirate in terms of real estate sales during Q2 2023. More than 800 deals worth AED 2.1B (USD 572M) were registered in the neighbourhood, 76 % of which related to villas and 24 % to apartments.
Abu Dhabi construction boom
The stability of prices in the freehold areas of the capital is explained by the limited amount of off-plan real estate.
It is expected that by the end of 2027, almost 34K residential units will be delivered in Abu Dhabi, out of which 59 % are villa developments. This will exceed the historical level, enabling to expand the overall scope of offers and keep prices stable.
There are 15 residential projects presented in Q2 2023, with approximately 6K units each of villas and apartments to be launched.
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