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Average apartment, and villa sales prices increased in Abu Dhabi by four per cent and two per cent respectively quarter-on-quarter, and 29 per cent since the second quarter of 2013, according to Asteco's second quarter 2014 real estate report.
Meanwhile, villa sales prices remained relatively stable over the same period, with an average increase of two per cent. Average apartment rental rates ran in parallel with villas, recording a growth rate in the second quarter of 2014 of up to 8 per cent.
Jerry Oates, general manager at Asteco Abu Dhabi, attributed the rise in demand to ongoing customer preference for new, master-planned communities in prime developments. ''Abu Dhabi has a standard degree of stability. The growth isn't huge; it's not as exciting or dramatic as it's been in the past, but I think it's more realistic, and there's more sustainable growth,'' Oates told Gulf News.
He expected market sustainability to be further buoyed by Abu Dhabi's plans to launch its own rental index this year, which is designed to create a more transparent market for Emirati investors. ''[There are] a few things on the horizon that are going to be fascinating options. You've got the delivery of a few projects, which are coming to a conclusion end of this year or early next year, and they will put a large amount of supply on. At the same time, you've got infrastructure projects, which are bringing people to the capital,'' Oates said.
Despite the increase in supply, Oates did not expect prices to go down, and said he projected a steady increase in demand as well.
With the federal cap having been removed last November, he said the market is now moving towards stability. ''We've seen this month not being such a high growth in rental incomes. Overall, I think the market cap has come and gone, and the market has adapted to it now,'' he added.
The market received a vote of confidence from investors following the successful off-plan sales launch by Aldar Properties, with its Al Hadeel project at Al Raha Beach selling out quickly. Aldar's project, Ansam, on Yas Island sold around 300 out of 540 units.
Rental rates for prime two-bedroom apartments on Abu Dhabi Island rose by five per cent to reach up to Dh200,000 per annum. Similarly-sized properties in the investment areas of Al Raha Beach, and Saadiyat Island also hit the same levels — up one per cent quarter-on-quarter.
For villas, a three-bed property on Abu Dhabi Island can still be rented for an average of Dh190,000. Meanwhile, Hydra Village, and Al Reef let for Dh95,000 and Dh140,000 per annum respectively. At the top end, Saadiyat Island's three-bedroom residences rent for up to Dh310,000 — a five per cent growth since the first quarter of 2014.
Source: Sarah Diaa, Staff Reporter, gulfnews.com