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Apartment sales prices in Abu Dhabi have witnessed strong growth in the fourth quarter as buyers begin to factor in further growth expectations, according to a report by real estate services firm Asteco. The report shows rates are up 11 per cent on average, compared to the previous quarter and 29 per cent compared to the same quarter in 2012.
“The sales price increases are due in part to the growing popularity of the newly established communities and the anticipated demand, which will also drive rental rates, coupled with limited new supply entering the market in the short term,'' said Jerry Oates, General Manager of Asteco Abu Dhabi.
"These aspects, combined with improving market sentiment, are making property ownership a more attractive option for both owner-occupiers and investors."
Demand has been particularly pronounced for Al Raha Beach, where the average price of an apartment is now between Dh1,175 and Dh1,425 per sq ft. Al Raha Beach benefits from its proximity to Dubai. The Gate Towers in Shams Abu Dhabi, Reem Island, has seen rates increase by 15 per cent since its handover in the third quarter, due to the completion of retail outlets on the island and the offering of a community environment.
Reef Downtown, an affordable development off-island, has outperformed the market with a 50 per cent sales price growth compared with last year. Current rates at Reef Downtown start from Dh825 per sq ft
“We would expect to see price growth to continue throughout the year, albeit at a slower pace than the previous year, .. said Oates.
Villa sales prices have followed a similar upward trend, with Al Reef Villas witnessing the fastest pace of growth, up 38 per cent compared to the previous year. Al Raha Gardens was up by 21 per cent and Golf Gardens by 13 per cent for the same period, where a three-bedroom villa is now priced at Dh2.85 million.
Rental rates have also grown rapidly during the first half of the past year, mainly due to demand from Dubai commuters relocating to the capital However, in the fourth quarter there has been a slowdown in rental growth, with modest rental rate increases of up to 5 per cent.
Annual rental rates for a two-bedroom apartment in the investment areas of Saadiyat and Al Raha Beach now average Dh190,000 per annum, however, Asteco believes that the current slow growth in rental activity is only temporary.
Source: Property Weekly