In Abu Dhabi, villas became 16% more affordable than 2014 levels

In the UAE capital, villa prices increased by 5.7% over the past year, but are still lower than the 2014 market peak. In Abu Dhabi, villas became 16% more affordable than 2014 levels.

The main factors that influence buyer behaviour are the relative stability and significant ‘discount’ from the last market peak. Average costs remain 25% lower than the 2014 peak, while total value has not changed for three and a half years now.

The low- to mid-tier segment of the real estate market demonstrates a more prominent growth in villa prices. The communities of Al Raha Gardens and Al Reef Villas experienced an increase in costs of 4.9% and 16.9%, respectively, since January 2020.

Villas in one of the most prestigious areas of Abu Dhabi — Saadiyat Island — are the most expensive, with property costs in the community exceeding 20 times the average family income. Saadiyat Island offers an outstanding price-quality ratio at around AED 1.3K (USD 354) per sq. ft.

The cost of housing in Abu Dhabi’s freehold communities rose by 1.6% in the second quarter, bringing average prices to AED 979 (USD 267) per sq. ft, which is 2.8% higher than in 2022. The cost stability in the freehold districts of the UAE capital is due to the limited number of new residences currently under construction.

It is expected that by the end of 2027, a total of 33,700 properties will be built, about 59% of which will be villas. This will gradually increase the total supply and will maintain the price stability of the real estate market.

In Q2 2023, 15 residential communities were handed over, with the number of apartments and villas released equal to about 6,000 in each complex.