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In Abu Dhabi, property prices, as well as rental payments, are rising. The UAE economy is recovering from the recession caused by the Coronavirus epidemic.
Residential sector
According to a report from CBRE, a consulting firm, in Abu Dhabi, housing costs increased by 1.5% in the last 12 months (from March 2021 to March 2022). From the beginning of the year to March, the average apartment price rose by 1.6% to AED 10,904 (USD 2,969) per square meter, while the villa average price increased by 1.1% to AED 8,850 per square meter.
In the capital, there was also an increase in average rental payments by 0.6% over the reporting period. While apartment rentals rose by 1.1%, villa rentals dropped by 1.6%.
The report states that the number of new projects is limited in Abu Dhabi. There were fewer than 200 new units constructed in the first quarter of 2022.
Another 9,588 units are scheduled for commissioning during the rest of the year, mainly at Al Raha Beach, Al Maryah Island and Reem Island.
Commercial sector: office rental
High demand for offices is connected with the gradual return of employees from remote work. According to Google's mobility information, Abu Dhabi's office sector shows a 25.3% increase in work attendance comparing with the pre-pandemic rate. CBRE estimates that work attendance has grown up by 4.1% since the beginning of the year.
The report says that the major demand in the private sector comes from companies that support flexible working hours, while demand for traditional office spaces still comes mainly from organisations with direct or indirect connections to the government.
The average rental payment for the 12-month period, (from March 2021 to March 2022), decreased by 7.9% and 3.9% in the Prime and Grade A market segments, respectively. During the same period, class B rentals remained the same. Abu Dhabi's best office buildings continue to show rental tolerance. According to an earlier report by Knight Frank, average rents in the Corniche district increases by 7.2% every year and now accounts for AED 1,675 per square meter.
The state of the UAE market
The UAE real estate market has improved with the help of the wide economic recovery in the country, and, at the time, with the help of the easing of restrictions connected to the pandemic and high oil prices.
In 2021, the country's gross domestic product was 3.8% higher than the growth recorded before the coronavirus pandemic in 2019. This was stated by Sheikh Mohammed bin Rashid, the Vice President and the Ruler of the Emirate of Dubai.
According to Emirates NBD Research, the UAE economy is expected to grow by 5.7% in 2022 thanks to increased oil production.
The UAE real estate market has also recovered with the assistance of government initiatives like residence permits for pensioners and remote workers, and expanding the conditions for obtaining a 10-year golden visa.
According to CBREA, in Dubai, property prices also rose by 11.3% in annual terms in the first quarter of this year. The total transaction volume reached 19,009 deals from January to March 2022. This is the highest rate ever recorded in the first quarter of the year.
Average rents also increased by 13.1% during this period, it was the highest growth rate recorded since December 2014. It is expected that the real estate market in the United Arab Emirates will receive a new flow of buyers after the revision of the visa system. The changes, which should enter into force by September, include the opportunity for parents to sponsor their male children until they turn 25.
