Average sale prices for high quality residential units in Abu Dhabi have rise by up to 26 percent in the last year, according to a new report by Asteco.
Despite the rise, average prices in the third quarter of 2013 are still between 20-50 percent below 2008 peaks, the real estate consultancy said.
Asteco said that with the lack of units available for sale in quality developments in Al Raha Beach, prices have risen by 19-26 percent compared to the previous year, with some of the smaller units in Al Bandar trading at as high as AED1,520 per square foot.
Similarly, Marina Square and Sun & Sky Towers on Reem Island have witnessed good levels of growth, up by 14 percent and 18 percent respectively.
Asteco said it expects that with the handover of The Gate Towers by year end, the amount of competing supply is likely to hamper growth in the short to medium term.
This may be further amplified with the delivery of City of Lights by end of 2014, although delays are likely,it added.
"While prices are moving upwards very quickly, investors should be confident that there is no bubble scenario imminent. If we compare Q3 2013 prices for these developments to the 2008 boom, it's an altogether different picture," said Jeremy Oates, general manager, Abu Dhabi, Asteco Property Management.
"Besides Sun & Sky Towers and Marina Square, Al Muneera and Al Zeina are 31 percent and 33 percent respectively below their 2008 highs; so there is still a long way to go for the market in terms of appreciation," he added.
Asteco said the leasing market has witnessed similar trends with rents increasing by over 20 percent in many areas compared to the previous year, including high and mid end properties.
This is mainly due to government employees returning to the city, following the implementation of the 12 September 2012 decree governing their emirate of residence, Asteco added.