ABU DHABI, UAE – Abu Dhabi’s residential sector has witnessed one of the best years on record, where a total of 11,200 units were sold across the capital, up 83 percent y-o-y.
The increase in demand for residences has been driven by several positive initiatives and announcements by the government, a thriving economy and new project launches, Savills latest research on the emirate’s residential sector showed.
Abu Dhabi has also benefited from a rise in the number of expats and digital nomads, as reflected in the Savills Executive Nomad Index, where the city made a new entry this year to claim 4th place.
Stephen Forbes, Head of Savills Abu Dhabi, said, “The growing demand has led to a spike in new project launches, with over 8,000 units launched. Market transparency also improved over the course of the year, making it more appealing to a broader range of investors and end-users beyond the traditional investor segment.”
He said, “In 2023, the market had benefited from an increase in investments by foreign nationals and sustained demand levels from the Emirati population.”
A steady rise in demand for high-end villas and townhouses was observed, Savills noted. The segment emerged as one of the most popular in 2023, a trend mirrored in other emirates.
In 2023, 4,800 villa and townhouse units were sold, accounting for 43 percent of total sales. Off-plan transactions accounted for approximately 84 percent of all villa and townhouse transactions.
Demand was highest for projects on Saadiyat Island, Yas Island, and Al Reem Island, indicating a preference for these waterfront locations among end-users and investors.
The Abu Dhabi Housing Authority (ADHA) has announced the opening of 1,700 units in Balghaiylam, a new residential development located north-east of Yas Island.
Ali Ishaq, Head of Residential Agency at Savills Abu Dhabi said, “Villa prices have appreciated across the emirate, with some locations recording higher gains than others.”
He said, “The average capital value for villas in the city grew by 6 percent y-o-y, to reach 11,800 AED/sq m, however some locations like Saadiyat Island and Yas Island recorded capital values as high as 16,000 AED/sq m.”
Apartments took up a larger share of the sales pie, comprising 57 percent of the transactions.
Off-plan apartments accounted for 69 percent of the demand. Due to the strong demand, nearly 3,400 units were launched in the year, with 51 percent located across the Yas and Saadiyat Islands.
In recent years, Yas Island has gained popularity among residents due to the introduction of new family entertainment options.
Saadiyat Island has witnessed the launch of 700 units by Aldar Properties, as well as projects like Nobu Residence, Manarat Living, and The Source.
Tiger Properties’ Renad Tower project added only 256 units to Al Reem Island, compared to Yas Island and Saadiyat, which saw more new project launches.
2023 saw several notable project launches, including Aldar Properties at Al Shamhka, Bloom Properties’ Casares at Bloom Living, Marsa Al Jubail, Jubail Terraces at Jubail Island, and Reportage Real Estate’s Royal Park at Masdar City.
The capital value of apartments continued to rise, increasing by an average of 6 percent year on year, while the average capital value for apartments in the city is at 14,800 AED/sqm, with some areas experiencing up to 18 percent y-o-y growth, and apartment rental values remained stable, with less than 1 percent growth y-o-y.
“The non-oil sectors have seen significant expansion over the past two years, remained healthy, and are well positioned to grow over the next twelve months, affecting the real estate sector positively,” said Swapnil Pillai, Associate Director of Research at Savills Middle East.
The industry has also profited from the government’s recent decision to remove the minimum down payment needed for applicants to qualify for a Golden Visa, since it will further encourage more people to become long-term city residents and encourage buyers to invest in real estate.