House prices in Abu Dhabi register increase during the second quarter

Average residential sale prices in Abu Dhabi rose in the second quarter as the property market showed signs of recovery amid the launch of new villa projects, according to a new report by consultancy JLL.

House prices in the capital rose by 1 per cent, compared with a year earlier, while prices in Dubai fell marginally by 2 per cent, the report said.

Villa prices in both emirates jumped as demand for larger homes rose. Abu Dhabi villas registered an annual increase of 6 per cent in the quarter while the prices of Dubai units were up 10 per cent.

New villa project launches in Abu Dhabi also had a positive effect on prices, said JLL. Aldar, the capital’s biggest property developer. unveiled villa developments on Yas and Saadiyat islands, which were sold to customers in record time.

“We expect outdated existing developments to continue to face pressure, particularly apartment developments, as new developments with larger unit layouts, attractive payment plans and community amenities have a stronger appeal to tenants and investors alike,” said JLL.

In Abu Dhabi, 815 residential units were delivered during the quarter, bringing the total stock to about 267,000 units. An additional 6,360 units are expected to come on to the market by the end of this year.

Residential stock in Dubai increased to 618,000 units with the addition of 10,000 units during the second quarter alone. Another 36,000 units are expected to be added to the market by the end of 2021.

The UAE’s property market continues to recover from the pandemic thanks to initiatives from the government.

Property prices in Dubai rose by 2.1 per cent monthly in June to Dh924 per square foot (Dh9,945 per square metre), the Property Monitor monthly market report said last week. Since bottoming out in November, prices have risen by more than 12 per cent, it said.

“The recovery still remains uneven between communities with the strongest price increases in the market for villas and traditionally sought-after communities,” JLL said. However, we expect the recovery to balance out over the rest of 2021 and switch to a more tenable pace across Dubai.”

The UAE’s hospitality sector is also showing signs of recovery, with occupancy levels rising in Dubai and Abu Dhabi to 58 per cent and 61 per cent, respectively, in the year to May.