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Fri 19 Jul 2019 02:16 AM

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Interest soars after Abu Dhabi opens up property market, prices fall

Bayut says prime areas such as Al Reem Island, Yas Island and Saadiyat Island are firm favourites for sales in first six months of 2019

Interest soars after Abu Dhabi opens up property market, prices fall

Abu Dhabi’s recent decision to open up its property market has widened the pool of investors in the region, with interest soaring for freehold areas like Al Reef, Al Raha Beach and Masdar City.

According to Bayut’s H1 Market report for 2019 which compared property trends from the second half of 2018 to the first half of 2019, prime areas such as Al Reem Island, Yas Island and Saadiyat Island are firm favourites for sales while affordable suburbs such as Mohammed Bin Zayed City, Khalifa City A and Al Muroor take the lead for rentals in Abu Dhabi.

Abu Dhabi Government modernised real estate laws in April to allow foreign ownership of freehold property in designated investment zones. Previously, foreign investors in Abu Dhabi property were generally limited to leasehold arrangements with 99-year leases.  

In terms of return on investment (ROI), Bayut said Saadiyat Island delivers the highest average rental yield at 8.7 percent.

Bayut added that prices for apartments sales and rentals declined on average between 4-11 percent during the first six months of the year.

Al Reem Island remains the most popular area in Abu Dhabi to buy and rent apartments, followed by Al Raha Beach for villa sales and MBZ City for villa rentals.

The report said freehold communities such as Al Reef and Al Raha Beach witnessed decreases in prices around the 13 percent mark, allowing investors to buy property in these mainland areas close to Dubai at affordable price points.

It also showed that emerging areas like Al Ghadeer are seeing an uptick in prices with 2-bedroom units going up by 6.7 percent, an increase attributed to the recent off-plan deliveries of larger units in the neighbourhood, leading to greater price fluctuations.

For villas in Abu Dhabi, Al Reef continued to be a favourite with potential investors while Mohammed Bin Zayed City led the rental market, Bayut said.

Prices to buy and rent villas in Abu Dhabi have also seen declines. For villa sales, the most notable decrease was seen in Al Reef, where 3-bedroom and 5-bedroom villas have dipped by 5.9 percent and 7.8 percent respectively.

For rentals, both Saadiyat Island and Al Mushrif have seen decreases of 9.1 percent for certain units.

Haider Ali Khan, the CEO of Bayut, said: “In the first half of 2019, we’ve seen Abu Dhabi take significant steps to cement its position as an attractive option for global investors by opening up its freehold market. In recent years we have seen Abu Dhabi gain more global exposure by playing host to notable international events including the Specials Olympics and the Formula One. These, I believe, will lead to an increase in expat and foreign interest in investing in Abu Dhabi real estate and prime locations like Yas Island and Saadiyat Island stand to benefit.”

He added: “The competitive pricing of the housing market, combined with ongoing development in infrastructure and tourism will not only bolster Abu Dhabi’s position as a global investment destination but also as a place for residents to establish roots.”

Arabian Business digital magazine: read the latest edition online