Record Growth in Abu Dhabi's Real Estate
Record Affordable Luxury Home Growth in Abu Dhabi by 2024
Abu Dhabi's real estate market underwent a significant transformation in 2024, with a continued increase in demand for luxury properties, while affordable residential areas begin to catch up. The secondary market transaction report released by Crompton Partners Real Estate Agency highlights these trends, showing record growth in areas like Saadiyat Island, while investor preferences are also changing.
Comprehensive Growth in the Real Estate Market
One of the most remarkable trends in 2024 was the widespread growth of the market. While luxury areas like Saadiyat and Yas Island lead the market, more affordable locations such as Reem Island and Al Reef are enjoying increasing demand. Lower middle-class buyers, previously present as renters, are now increasingly pursuing purchases, as the ongoing growth suggests long-term value.
Although Reem Island showed a 6.3% decline in average sales prices in the first half of the year, both rental and sales prices began to rise in the second half. A similar trend is observed for Al Reef, which was previously a stable priced "haven" for renters, but is now experiencing price increases.
Experts predict a 5-10% price increase in these areas in 2025, also implying the growth of previously stable rental rates.
New Level of Demand for Luxury Properties
Demand for luxury villas and penthouses has reached an unprecedented level. Secondary market villas in Hidd Al Saadiyat and off-plan units at Nobu Residences generated transactions worth 130 million dirhams. Experts claim that the post-pandemic economic recovery was a key factor in this segment.
High-profile projects like Saadiyat Grove and Saadiyat Lagoons have further increased investor confidence, resulting in returns exceeding 100% in some cases.
Outstanding Growth of Saadiyat Island
Saadiyat Island has become Abu Dhabi's most sought-after real estate market target. In Mamsha Al Saadiyat residential area, the average sales price per square meter rose by 58.8%, surpassing growth on all other areas.
One of the main reasons for the growth is the island’s prime location near the Abu Dhabi Global Market (ADGM), attracting financial professionals and wealthy buyers. The world-class facilities located there and the proximity to the cultural district further enhance the area's attractiveness.
Other Key Areas
Yas Island's Noya community also came into focus, achieving the highest annual turnover rate of 16.7%, mainly among families and first-time buyers.
In contrast, Al Reef Villas Phase 2 community showed the lowest turnover rate of 2.7%, offering long-term investment opportunities.
Al Reem Island boasted the highest number of transactions, with 1,352 units sold, totaling 1.54 billion dirhams. Saadiyat Island, while having less transactions, only 99, achieved a value of 1.67 billion dirhams, reflecting its premium nature.
Dominance of Off-Plan Properties and Future Prospects
Off-plan properties continue to dominate the market, constituting nearly half of all transactions. Investors choose these projects due to lower initial costs and high value growth potential. Developers like Aldar launch premium projects that sell quickly, despite high prices.
In 2024, there was a slight decrease in the number of new off-plan projects, directing investor attention to the secondary market.
Abu Dhabi's controlled housing supply expansion (2-3% annual growth) further enhances investment attractiveness, contrasting with Dubai's market, where available housing grows by 8-10% annually.
Given the current real estate market situation, approximately 55,000 saleable apartments are available out of a total of 280,000 units in the city, resulting in intense competition among local and international investors.
Experts anticipate continued growth in the popularity of the secondary market as it offers stability and returns, while off-plan projects remain attractive due to lower initial costs and the potential for high returns.
Summary
2024 is a significant year for Abu Dhabi’s real estate market, with both luxury and more affordable properties enjoying increasing demand. Investors are paying more attention to the secondary market, offering stable price growth and long-term returns.
