Abu Dhabi forecast to see more first time buyers in 2020 as prices fall
2020 will be an "important year" for the real estate sector in Abu Dhabi with more first-time buyers likely to enter the market as prices continue to become more attractive, according to property website Bayut.
Its latest report also said the trend of announcements coming out of the emirate, in terms of infrastructure, development and legal transparency is set to continue this year.
The report added that 2019 was a dynamic year for Abu Dhabi’s real estate sector, with significant developments from the government to create more viable conditions for investors, buyers, sellers and tenants.
Bayut’s data revealed that Abu Dhabi’s property sector has followed the trend seen in Dubai, with sales and rental prices becoming more competitive across popular areas in the emirate.
Abu Dhabi’s Department of Urban Planning and Municipalities reported AED31 billion worth of real estate transactions took place in the emirate in the first half of 2019.
Freehold areas such as Al Reem Island, Saadiyat Island, Yas Island and Al Reef have continued to lead the sales segment for the secondary market with competitive prices, Bayut added. These island communities have also held the attention of buyers in the primary market.
Al Reem Island has also remained a favourite with tenants, along with affordable neighbourhoods such as Mohammed Bin Zayed City and Khalifa City A.
Bayut’s report confirmed that there have been declines in average sales price across the board for apartments and villas in 2019 compared to 2018.
Data on the average sales price per square foot for apartments showed that Al Reef has witnessed a decline of 15.1 percent in 2019 while upscale neighbourhoods such as Yas Island and Saadiyat Island remained stable with marginal decreases around the 1.5 percent mark.
In terms of the average sales price per square foot for villas, Al Raha Gardens saw declines of 11.2 percent, reflecting the current competitive nature of the market, Bayut noted.
When it comes to return on investment, Bayut said Al Maryah Island has the highest rental returns for apartments at 10 percent while Al Reef offers a healthy ROI of 7.1 percent for villas.
Haider Ali Khan, CEO of Bayut, said: “Opening up of the freehold market to foreign investment has exposed the real estate sector in Abu Dhabi to a whole new set of interested investors and buyers."
Abu Dhabi’s rental market has also continued to be tenant-friendly with moderate decreases in rental costs for apartments and villas in popular areas in 2019, Bayut said.