In 2020, a number of measures to support the nation were implemented by the Abu Dhabi government in order to stimulate and raise the declining real estate market.

These initiatives had helped retain public confidence in the sector and had led to further demand, boosting interest.

About 1,700 apartments and 50 villas were recorded by Asteco to have been delivered in the first quarter of 2021, with 11,600 additional residential stocks (11,000 apartments and 600 villas) expected to enter the fast-paced market by the end of the year. Last year, Asteco has recorded a total of 8,200 new residential units delivered, which is lower compared to this year’s pending properties to be handed over. More than half of these stocks are located in the investment zones of Al Reem Island, Al Raha Beach and Yas Island. However, it is important to note that actual materialisation and delivery may be less due to delays and phased deliveries by developers.


Abu Dhabi Rental Market

There has been a noticeable tenant movement over the last three months, with a large number of people continuing to upgrade to larger living spaces, taking advantage of the increased affordability of properties and flexible payment terms set forth by landlords – a behaviour seen throughout the onset of the COVID-19 pandemic. Although the average rental prices remain the same over Q1 2021, there was a significant increase in rents and demands for specific communities such as West Yas (more than 12%), Golf Gardens and Saadiyat Beach Villas, all offering villas and townhouses, providing outdoor spaces.

While prices in Abu Dhabi continue to decline annually, there is a modest increase visible on a quarterly basis. Rent prices in Q4 2020 for apartments had an average decline of 6% from Q3 2020 to Q4 2020 while villas and townhouses saw a 2% quarterly increase.


Abu Dhabi Sales Market

In 2020, the average sales prices of residential properties have declined by 2%. The average apartment prices dropped down to 3% due to the limited demand, particularly for old, mid quality stocks while the villas have increased by 2%, a historic first as an annual increase in prices since 2014. Currently, Abu Dhabi properties’ sales prices remain stable.

Completed villa transactions and demand continued to rise in Q1 and Q2 2021, driven by the limited availability of good quality properties at discounted rates. West Yas, Yas Acres and the Saadiyat villa development have seen a sharp rise in sales prices. Al Reef, an affordable community has also generated interest as the sales prices rose up to 7%.

As the population of Abu Dhabi was estimated to have declined roughly by 5% in 2020, residential property values evidently dropped in 2020. While 2021 promises a better market situation for real estate, the population growth that largely affects the market will only likely return by late 2022. The new, limited supplies in the emirate is also expected to maintain property values in 2021.


Source: ASTECO Abu Dhabi Property Review Q1 – 2021 Report

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