Return on investment (ROI) in Abu Dhabi's real estate market is expected to remain steady this year despite the trend of declining rents, according to new research.
Bayut.com, the UAE’s data-driven property portal, said the UAE capital’s property market remained a sound investment choice with Al Reef villas and apartments ranking highest with ROI of 7.67 percent.
It said Al Reef has a combination of villas and apartments with an average price of AED752 per sq ft across both property types.
Apart from offering the highest ROI in Abu Dhabi, the area also falls within the more affordable range of property prices in the capital, making it the perfect choice for investors, the report noted.
Studio apartments in Al Reef have a starting sale price of AED570,000 while two-bed villas start at AED1.2 million.
Located on the Dubai-Abu Dhabi border, Al Ghadeer also fared well in terms of investment returns, Bayut.com said, adding that the area delivers an ROI of 7.40 percent, ranking second.
Al Ghadeer is a gated community including villas, townhouses and low-rise apartment blocks, along with a few commercial and retail spaces and has been developed by Aldar.
Interested investors can expect to pay AED400,000 upwards for studio flats in Al Ghadeer, while the asking price for two-bed townhouses starts at AED1.05 million, the report said.
It added that Al Raha Beach and Al Reem Island also deliver relatively high average ROIs in Abu Dhabi at 7.17 percent and 7.09 percent, respectively.
Some of the other areas that also made it to the list include Al Raha Garden, Hydra Village, Saadiyat Island, Al Raha Golf Gardens And Al Salam Street. Property returns in these areas ranged from 5.07 percent (Al Salam Street) up to 7.10 percent (Al Raha Gardens).
Haider Ali Khan, CEO, Bayut.com, said: "Return on investment is arguably the most important factor that investors take into consideration when purchasing a home. This can come in terms of asset appreciation over time or rental yield.
"Our data, for Abu Dhabi's top localities, reveals that rental yields are hovering around 6 percent of the sales prices as of today. We expect this number to remain relatively stable through 2018.”
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