Abu Dhabi property prices soar up to 37% in 2013

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Abu Dhabi property prices surged as much as 37 percent in some districts in 2013 amid a shortage of mid-sized family homes in the UAE capital, a new report by dubizzle has found.

The report also found rental prices increase by up to 18 percent in some areas.

Property portal dubizzle said in its latest 2013 price trends report that the biggest increase in property prices in Abu Dhabi last year was for three-bedroom apartments and villas.

Among the biggest jumps, prices for three-bedroom villas in Raha Gardens increased 37 percent to an average AED2.6 million, followed by a 27 percent jump in the price of three-bedroom apartments in Al Reem Island, Tamouh Square (AED2.75m) and 26 percent rise for three-bedroom villas in Al Reef (AED1.68m).

In its analysis, dubizzle said Abu Dhabi had always been noted as an attraction place to live for families seeking a more laid-back lifestyle than that of Dubai.

“The lack of three-bedroom units in the capital in demand by mid-sized families has caused the asking prices to rise over 2013,” it said.

Dubizzle said that Al Reem Island was one of the few modern districts in Abu Dhabi that both offered a “premium lifestyle” and was close to the city centre.

However, it foreshadowed a dip in prices in the near future, with recent announcements by developers Tamouh and Aldar set to add more than 7,000 units, including three-bedroom apartments, to the market in the next 12 months.

“Prices in Al Reem Island should experience a slight dip as more units are pumped into the market,” Ann Boothello, property marketing specialist at dubizzle, said.

The report said Raha Gardens and Al Reef communities, which were on the outskirts of the city, were attractive to families who may send their children to school in Dubai or who may have a member of the household commuting to Dubai for work.

Meanwhile, the report said two-bedroom apartments in Al Khalidiyah recorded the biggest rental price rise of 18 percent from an average AED85,000 a year to AED100,000.

The next-highest rises were one-bedroom apartments in Mohammed Bin Zayed city (AED45,000) and Al Reem Island Gate District (AED90,000), which both recorded a 13 percent price rise.

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Posted by: Ali

"Ridiculously high" in comparison to what? Rents are still lower than in Hong Kong or London, and apartments in Abu Dhabi are larger as well

Posted by: Telcoguy

I think Wyan is comparing to the salaries. Rents can only go up to a percentage of income, in a place with very high labor mobility (the infamous road to the airport theme) you can only press so much before it stops making sense for people to stay here

Yes, yes there are dozens that will come, da da da da, but they will face the same scenario (they may be more accommodating to sharing accommodation, that will keep higher rents but more empty units)

In the end rental income is upper bound by the aggregated salary volume

Comparing to London or Hong Kong is not really relevant in this discussion as rental is not a tradable good and its demand is limited to local demand

In this sense this is a fascinating place to see the interplay of micro and macro, few places have the level of flexibility to adjust aggregated demand (i.e. population) as here

Posted by: Wyan E.

As usual Abu Dhabi is driving the real estate market up again, this bloating of numbers will lead to another bust.

Rent prices are ridiculously high in the U.A.E 80% of the expats who are the renters, btw, can't afford the rent while those who can are renting out the 1 brs thus the high demand for them.
How can families demand for 3 bedrooms when UAE's immigration policies are driving out the families?
Don't they realize that the demand for these units are so high because they are re-rented out per room or as bedspace for 4 to 6, sometimes 10 people in a room like sardines?

I know all this, I've been in the front lines, have shed my fair share of sweat only to be presented by absurdly priced units that are either ugly or old while some are villas partitioned oddly. And this from a guy who belongs to the slightly higher wage bracket in UAE.

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