Leasing rates for low-cost housing in Mussafah and MBZ and apartments in Al Raha Beach have jumped with an average of 8% since the beginning of 2013. That was announced in a report by Asteco. The report covers Abu Dhabi’s real estate market during Q1 2013. According to it, the sales market has grown and Al Bandar prices have increased with an average of 13.5%.
Over the first three months of the year, Abu Dhabi’s leasing market continued to enjoy stability and strong demand. As a result, rental rates have gone up 8% on the average. This was especially the case in the high-price segment. The rise was caused mainly by the fact that tenants looked either for the cheapest areas or for quality.
The situation was similar on the sales market, where stronger values in demanded, established communities reached up to 13.5%.
The report informs that the difference in rental prices in Abu Dhabi and Dubai will soon be eliminated. Moreover, Abu Dhabi has an offering that is more competitive since the quality in this market of the city has increased. According to Asteco, more and more expats to UAE choose to settle down not in Dubai but in Abu Dhabi.
In addition, the research points that the rental rates of apartments in the areas MBZ and Mussafah, as well as in Al Raha Beach have jumped with 8% on the average in Q1 2013. In comparison, Muroor and Khalifa ‘A’ and ‘B’ registered a growth in rental rates of only 3%
The average rental price of a two-bedroom apartment in Saadiyat Beach is between AED135,000 and AED190,000 while those in Al Raha Beach reached a rate between AED125,000 and AED170,000. The annual rents of cheaper two-bedroom properties in MBZ and Mussafah were betweenAED45,000 and AED55,000 on the average.
The report also takes a look at rental rates of villas in the region. Three-bedroom villas in Al Reef had a rental price of AED105,000 – AED120,000 per year, while those in MBZ and Mussafah were in the range of AED80,000 – AED105,000 per year.
Sales prices in Abu Dhabi also grew during Q1 2013. Apartment prices in Al Raha Beach Muneera and the Sun & Sky Towers development at Shams Abu Dhabi increased with 8% and 7%, respectively. The jump was even more impressive with Al Bandar apartments which registered a growth with 13.5% on the average between the January-March period. Other areas, like Al Reef Downtown saw a little increase of just 3%.
Presently, a two-bedroom apartment in Al Muneera is about AED1,000 per sq. foot (AED10,756 per sq. meter). Apartments of the same size in Shams Abu Dhabi are estimated at AED1,125 per sq. foot (AED12,101 per sq. meter), while those in Al Budnar are around AED1,250 per sq. foot (AED13,445 per sq. meter).
Sales prices of villas in Al Reef Villas and Al Raha Gardens registered a growth of barely 1-2%. As a result prices of three-bedroom villas in Al Raha Gardens and Golf Gardens reached AED1.8 million and AED2.6 million, respectively. In Al Reef Gardens, three-bedroom houses cost AED1.3 million on the average.
The study reports that the sales market in some areas has improved. That was quite visible in Al Bandar, where Q1 sales have greatly jumped.
There was also a change on Abu Dhabi’s office rental market during the January-March period. That was because the relocation demand of companies and the government sector was successfully met last year. However, new international firms continued to choose Dubai over Abu Dhabi.
The report has found that grade A core and shell rental rates did not mark a change in Q1 2013 and stayed at AED1.250 per sq. meter per annum. Similar was the case with grade A-newly-built fitted office space which had an annual rental price of AED1,600 per sq. meter.