The price of property in Abu Dhabi increased last year because of rising demand from families moving to the capital for work, the latest statistics from a classifieds website have revealed.
The price of property in Abu Dhabi increased last year because of rising demand from families moving to the capital for work, the latest statistics from a classifieds website have revealed.
The 2013 Real Estate Price Trends Report released by dubizzle on Sunday showed three-bedroom homes were the most sought-after properties as people uprooted their families from neighbouring emirates in line with a decree that government workers should live in Abu Dhabi.
The report also revealed Al Khalidiyah in the city centre and Mohammed bin Zayed City and Al Reem Island Gate District on the outskirts saw the biggest increases last year.
Three bedroom apartments in Al Reem Island’s Marina Square registered a 27 per cent rise in price from Dh2.16 million to Dh2.75 million between January to December.
The price of three-bed villas in Raha Gardens increased by 37 per cent to Dh2.6 million by the year-end, while similar properties in Al Reef increased by 26 per cent to Dh1.68 million.
Proximity to the city centre pushed up prices in Marina Square, but analysts believe additional units to be released this year will help to calm the market.
“With recent announcements by developers like Tamouh, as well as Aldar, stating that they will be handing over 7,000 units in the next 12 months including three bedroom apartments, prices in Al Reem Island should experience a slight dip as more units are pumped into the market,” said Ann Boothello, property marketing specialist at dubizzle.
Easier access to Dubai schools and workplaces for those who moved to the capital last year had pushed up sale prices for larger apartments in communities on the outskirts of Abu Dhabi such as Raha Gardens and Al Reef, although analysts believed the prices would even out over the long-term.
“This year I believe even if the prices move up initially, things will stabilise,” said Wendy Shen, a property consultant with West Legend Real Estate, who had several clients move to Abu Dhabi complying with the government’s ruling.
“Many people moved last year and prices went up, but this year should be better. Also with the Expo win there will be more projects in Dubai, so staff will need to move back for jobs.”
Location and low supply were other reasons rents were pushed up in Abu Dhabi last year, the report said.
Rents for two-bedroom apartments in Al Khalidiyah rose from Dh85,000 to Dh100,000, an 18 per cent increase.
One-bedroom apartments in Mohammed bin Zayed City and Al Reem Island Gate District followed with a 13 per cent rise.
Residents in more established areas such as Al Khalidiyah traditionally paid lower rents since they are covered under old contracts. However, the lifting of the rental cap in Abu Dhabi in November last year drastically altered the market.
Tenants in units rented out below the market rate have been immediately affected forcing them to search for affordable alternatives. However, analysts said long-term prices will be competitive to ensure occupancy.
“With old tenants leaving, driving supply up in these areas, it will ultimately cause landlords to price their properties more competitively over time as there are more options for prospective tenants to choose from and landlords will lose out if they keep their units vacant,” Ms Boothello said.
A similar housing trend report from dubizzle covering Dubai will be released in the next few weeks.