Abu Dhabi Real Estate Market Trends
The market report for Q3 2020 is now released – delivering interesting figures for investors, buyers, landlords, and tenants.
In terms of rental demand trends by area, Al Reem Island and Abu Dhabi Island showed the highest levels of demand for this quarter where Al Reem Island got the highest level by 27% compared to 23% in the second quarter of 2020 and Abu Dhabi at 14%.
The Khalifa City and its surrounding areas ranked third by 13% – representing an increase of 3% compared to the second quarter of the same year, and Al Reef ranked fourth with 10% – although it witnessed a decrease of 2% compared to the second quarter of the same year.
On the other hand, Hydra Village witnessed an increase in demand by 1%, while the ratio stabilized in Al Raha Beach by 6%.
Al Ghadeer, Al Raha Gardens, and Yas Island faced a slight decrease in demand by 1%, 2%, and 2% respectively. While Saadiyat Island witnessed a decrease of 5% to reach 8% compared to 13% for the second quarter of the same year.
The direction of rental demand changed in line with the prices. The price drop stopped somewhat and was replaced by installments paid throughout the year, ranging from two to monthly payments.
Figures issued for the rental demand trends by type of apartment reflect some stability, with the exception of studio type where the demand decreased compared to the second quarter of the same year.
The demand for 3-bedroom apartments showed a clear increase of 4% to reach 19% from its stable 15% demand in the first and second quarters of the year.
The demand for 1-bedroom apartments and studios decreased by 1% and 3% respectively. Meanwhile, the demand for 2-bedroom apartments remained stable at 28% during the second and third quarters.
In general, the demand remained stable among all types of apartments with the exception of the studios where the demand decreased due to the move of tenants from studio apartments to one-bedroom apartments being within the same prices due to the decrease in the rent price in the region.
The demand for renting three-bedroom villas ranked at the highest levels with 43% in terms of demand, showing an increase of 6% compared to the previous quarter. While the demand for renting 5-bedroom villas ranked second with an increase of 4% to reach 19%.
2-bedroom and 6-bedroom villas also increased to 13% and 10% respectively from their 12% and 4% demand recorded in the second quarter of the year.
Meanwhile, the 4-bedroom villas faced a dramatic decrease in demand of 17% from its 32% demand last quarter to reach 15% this quarter.
Because of the decrease in real estate prices, the tenants shifted and opted for ownership solutions, especially among the tenants of villas consisting of 4 bedrooms, which will show in the statistics hereafter related to the real estate market in terms of sales.
Moving to the sales trend by area – Al Reem Island, Khalifa City and its surrounding areas monopolized the highest percentage of demand among other regions of Abu Dhabi with 28% and 15% recorded respectively, followed by Yas Island with 12% and Abu Dhabi mainland with 10%.
Al Reem Island witnessed a remarkable increase in sales by 12% to reach 28% and exceed the demand recorded in the first quarter by 2%.
Although Khalifa City ranked the second-highest level of demand with 15%, it faced a slight decrease of 3% compared to its 18% demand in the second quarter of the year.
Also, the demand for Saadiyat Island decreased by 2% to reach 8% as well as for Al Reef Village which showed a clear 2% decrease in demand to reach 8%.
As for Al Raha Beach, the demand showed a slight decrease of 1% bringing the demand to 2%. In Al-Ghadeer, it increased by 2% to reach 7%.
The demand for Al Raha Gardens and Abu Dhabi Island decreased by 3% to reach 4% and 10%, respectively, while Hydra Village remained at the same level, at 5%.
However, demand on Yas Island continued to decrease by 1% to reach 12% versus 13% for the second quarter of the same year and 14% to 13% for the first quarter of this year.
From these numbers, we can conclude that the category of real estate buyers is different as some are looking for luxury and others are looking for comfort and affordability. Some buyers are end-users and others are investors in small and medium-sized properties or projects under construction offered at reasonable prices.
Real estate sales market trends by type of apartment reveal a strong demand for two-bedroom apartments, where a continuous increase to reach 41% has occurred in the last quarter.
The type of apartments consisting of three bedrooms increased in demand by 1% in the last quarter.
The demand for studio apartments decreased by 10% compared to the second quarter of this year, to reach 20%.
Moreover, the demand for sales of 1-bedroom apartments decreased by 8% compared to the first quarter to reach 28%. The 4-bedroom apartments remained at the same level as the previous quarter, at 1%.
In general, the two-bedroom apartments received the highest demand, followed by the one-bedroom apartments, then studio apartments, then 3 and 4-bedroom apartments, respectively.
Moving to sales trends according to the type of villa, the statistics show interesting movements among all types of villas, as 3-bedroom villas achieved the highest ranking with 32% of sales demand compared to its same demand level of 26% for the last two quarters of the year.
The 2-bedroom villas have risen yet again with an increase of 5% to reach 22% compared to 17% for the second quarter of the same year, where demand has increased continuously over the past four quarters.
Meanwhile, 5-bedroom villas also showed an increase of 1% from its 16% demand last quarter to reach its 17% demand this quarter.
On the other hand, the 4-bedroom villas witnessed a decrease of 9% in sales to accumulate 32% instead of 23%, as it ranked second after the 3-bedroom villas.
6-bedroom villas also showed a slight decrease of 3% in sales to accumulate 9% instead of 6%.
From this data, we can conclude that the type of request varies according to the needs and capabilities of real estate buyers, investors, and end-users. Where the end-users search for the purchase of vast units, and the investors search for the smaller units where the process of earning investment returns is quick, in addition to its selling process is easy – when decided.
In general, the trend of rental demand increased dramatically by 20% compared to the first and second quarter of 2020 to reach 28%, due to the special circumstances related to the coronavirus pandemic and precautions made by the government and the tenants by postponing the dates of termination of the lease contracts and moving from one leased house to another.
Meanwhile, the trend of demand for sales has doubled compared to the second quarter of 2020 to reach 22%
With the continuous decline in rental prices, it is now easy to choose from a number of luxury properties that are available at convenient and affordable prices.
Now, tenants can move to either property of the same size but available at lower prices, or to larger units while adhering to their housing allowance budget. They have more choice and more opportunities to improve the quality of life within the limits of their budget.
On the other hand, the relatively low prices allowed investors to obtain real estate at better prices due to the increase in the number of units available on the market.
From this graph, we can conclude that the largest proportions of buyers are end-users. The demand for investment for expatriates remained stable with 1% although it decreased by 2% from the 3% recorded in the first quarter of 2020.
However, end-users still show a high demand, especially for UAE citizens even though the demand decreased by 12% from 61% last quarter, it is still showing the highest demand, making the ratio 49% for citizens who wish to purchase for the purpose of housing.
On the other hand, the demand for the end-users coming for the purpose of housing increased significantly to reach 48% from its 34% end-users demand last quarter.
While the demand for real estate for the purpose of investment on the part of the Emirati investors witnessed a slight decrease, the percentage decreased to 2% versus 3% accumulated in the previous quarter.
This type of crisis is the ideal period for investing in real estate where the purchase cost is relatively low against a good rental income for existing projects. It is expected that real estate prices will rise again in the first half of 2021. Now is the time to invest in the projects under construction with the bundle of offers and advantages exceptionally offered for this period and for a limited time. The value of the properties will also rise automatically once the COVID 19 period is due, which may coincide with the completion of a batch of projects under construction. It is also profitable to invest in existing projects where income is generated and returns are earned instantly upon purchase.
A number of interesting off-plan projects ranging from Apartments, Duplexes to Townhouses and Villas, are listed with Nationwide Middle East Properties with different handover timelines throughout the year of 2020 such as West Yas, Mamsha Al Saadiyat, Jawaher Al Saadiyat, The Bridges, and many more projects and properties that you can discover on www.nwmea.com.
For more details and to unveil a free consultancy, please call 80014444 or 0509138969.
For more details and inquiries, please feel free to call 80014444 or WhatsApp 0509138969.