Abu Dhabi home sale prices stabilise in Q2
Abu Dhabi, July 9, 2014
Average apartment and villa sales price increases in Abu Dhabi stabilised at 4 per cent and 2 per cent respectively during the second quarter (Q2) of the year compared to Q2 2013 as investor confidence returned, a report said.
Average apartment rental rates ran in parallel with villas recording modest Q2 growth rates of up to 8 per cent, according to the Q2 2014 Abu Dhabi residential real estate report published by Asteco, a major real estate services firm.
“Ongoing tenant preference for newer, master planned communities drove demand for apartments in prime developments within investment areas, while affordable villa locations continue to be popular,” said Jerry Oates, general manager, Asteco Abu Dhabi.
“Market sustainability will be further buoyed by Abu Dhabi’s plans to launch its own rental index this year, designed to create a more transparent market for UAE national investors, regulating maximum rental increases,” he added.
The market received a vote of confidence from investors following the successful off-plan sales launch by Aldar, with its Al Hadeel project at Al Raha Beach, selling out in a matter of hours and Ansam on Yas Island selling approximately 300 units out of 540.
Buyers snapped up all 223 Al Hadeel apartments and townhouses, which ranged from Dh1,350 ($367) to Dh 1,450 per sq ft for an apartment whereas apartments at Ansam achieved sales prices of between Dh1,450 to 1,550 per sq ft.
Growth for low to mid-end apartment unit developments, such as Reef Downtown, dropped to 2 per cent in Q2, implying that prices reached a peak in Q1 2014. Prices, however ranged from Dh900 to Dh1,150 showing an impressive 55 per cent year-on-year figure.
Raha Beach / Al Muneera saw 6 per cent growth, asking for up to Dh1,500 per sq ft, bringing year-on-year growth to a healthy 27 per cent.
The stabilisation in villa sales prices nevertheless saw sales prices for a three-bedroom home in Hydra Village grow by 4 per cent to reach Dh1.3 million while the standard Saadiyat Beach Villas rose by 2 per cent to hit Dh5.8 million for three bedrooms.
Rental rates for prime two-bedroom apartments on Abu Dhabi Island rose by 5 per cent to reach up to Dh200,000 per annum, while similarly sized properties in the investment areas of Al Raha Beach and Saadiyat Island, also hit the same levels, up just 1 per cent quarter-on-quarter.
For villas, a three-bed property on Abu Dhabi Island can still be rented for an average of Dh190,000, whilst the affordable locations of Hydra Village and Al Reef let for Dh95,000 and Dh140,000 per annum respectively.
At the top end, Saadiyat Island’s luxury three-bedroom residences rent for up to Dh310,000, a 5 per cent growth since Q1 2014.
Abu Dhabi office leasing figures recorded moderate quarter-on-quarter rental growth of 3 per cent for Grade A fitted commercial space whereas ‘average quality’ Grade B commercial rates remained stable, for both fitted and shell & core.
On Abu Dhabi Island, Grade A office space achieved net effective rental rates estimated at Dh1,700 per square metre for fully fitted space; while rental rates for upscale Sowwah Square remain unchanged over the last 12 months, as leasing is on hold pending confirmation of free zone status.
Rental rates for Grade B office space stood at Dh800 per sq m for fitted and Dh700 for shell & core with good quality older stock also renting from Dh700 to Dh1,100 per sq m. – TradeArabia News Service