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The capital Abu Dhabi's real estate market has been notably stable in the last few quarters and this looks to continue throughout this year according to reports.
Asteco's Abu Dhabi Property Review: 2014 Highlights and 2015 Outlook revealed that the Abu Dhabi property market had improved over the last two years and is set to continue this year, seeing further rental growth across all sectors.
Villa sale prices increased by 16 percent in 2014 compared to the 15 percent increase in apartment sale prices for the same time, but the volume of transactions declined due to the shortage of quality new stock available in the secondary market.
Since their lowest point back in 2012, villa prices have increased an impressive 47 percent on average, with an increase of 19 percent during the last year alone for areas such as Al Raha Beach, Golf Gardens and Al Reef Villas. However, the prices remain 11 percent lower than their 2008 peak.
The report attributes the limited introduction of prime and high-end developments into the market for the relatively limited amount of change expected this year.
Despite the continuous 20 percent increase in rental prices since their low point in 2012, rental rates for villas are still considerably lower than they were in 2008. In fact, they are over 40 per cent more affordable which indicates a significant amount of potential further growth.
Therefore, villa rental rates are expected to increase in 2015 due to the shortage in supply while occupancy rates are expected to remain high.
For instance, a four-bedroom villa in 2011 would expect to receive Dh203,000 a year whereas it could be leased for approximately Dh239,000 in Q4 of 2014. This is a significant increase that is still a far cry from the Dh433,000 it would have fetched in 2008.
• Villas have seen a slightly higher increase in prices compared to apartments
• Al Raha Beach, Golf Gardens and Al Reef Villas posted an increase of 19 percent
• While there will be supply shortage, occupancy rates are expected to stay high
Read more - Are you ready for lease renewals in Dubai?
Source: Nicholas Baker, Special to Properties
The writer is a freelancer