Gulf Today, Staff Reporter

Knight Frank, the leading global real estate consultancy, has unveiled its Abu Dhabi Residential Market Review, Summer 2023, providing an in-depth analysis, revealing key insights into the city’s residential real estate landscape. According to the report the Villa prices grew 4.7% between March and June and are now 5.7% higher than this time last year.

During Q2 2023, Al Reem Island emerged as Abu Dhabi’s most active submarket for sales, recording Dhs 2.1 billion in deals through a total of 816 sales transactions, with villas accounting for 76% and apartments making up 24% of the total. Saadiyat Island followed in second place at Dhs 1.2 billion, apartments here dominating the sales at 68%. Yas Island ranked third at Dhs 919 million with villas leading the sales at 65%. The total value of transactions across Abu Dhabi increased substantially to Dhs 6.1 billion, representing a growth of 103% compared to the same period last year.

Residential values across Abu Dhabi’s freehold areas experienced 1.6% growth in Q2, taking average prices to Dhs 979 per square foot (psf), representing a 2.8% increase on 2022.

Faisal Durrani, Partner, Head of Research, Middle East and North Africa, commented: “The relative stability and substantive ‘discount’ on the last market peak are two key factors influencing buyer behaviour. Average prices remain 25% cheaper than the 2014 peak and values have remained relatively unchanged for three-and-a-half years now, which is instilling confidence in buyers to transition from renting to owning or upgrading where possible.

“Home upgrades are driving price growth in certain segments of the market, with more affordable villa locations, such as Al Reef Villas for instance, registering the strongest price growth in the villa market (17%) since early 2020 as buyers use the opportunity to upgrade from apartments to villas”.

When segmenting by property types, villas (Dhs 871 psf) are now 16.1% more affordable than 2014 levels, compared to apartments (Dhs 1,035 psf) which trail the last market high by 27.2%.

Notably, the growth in villa prices is more pronounced in the low to mid-tier segment of the market, particularly at Al Reef Villas (Dhs 686 psf) and Al Raha Gardens (Dhs 826 psf), experiencing price growth of 16.9% and 4.9%, respectively, since January 2020, in contrast to a 0.8% decline at Saadiyat Island (Dhs 1,337 psf).

Durrani continued: “On Saadiyat Island, which remains Abu Dhabi’s most expensive freehold villa submarket, prices appear to be stabilising once more after a near 12-month decline. While Saadiyat Island continues to offer excellent relative value for money at around AED 1,300 per square foot, particularly when compared to similar Dubai neighbourhoods, there is a clear price sensitivity threshold here, beyond which buyers appear nervous to commit”.