Residential house prices in Abu Dhabi grew seven per cent during the second quarter of this year, bringing the average increase during H1 2014 to 17 per cent, a report has found.
According to the latest report from property consultants JLL, sales prices for a two-bedroom apartment grew five per cent quarter on quarter in Q2 2014 and 28 per cent on a year-on-year basis.
Meanwhile, villa prices saw a five per cent growth quarter-on-quarter in three months to June 30, while rising 27 per cent year-on-year.
Residential rents have also grown in the capital with both apartments and villas seeing an increase in rates.
The average rent of a two-bedroom apartment surged three per cent over the last quarter and 15 per cent year-on-year, the report said. Villa rents grew three per cent in Q2 2014 and almost six per cent year-on-year.
“The recent removal of the rent cap has had a major impact on rents in secondary buildings in Abu Dhabi as landlords have taken the opportunity to increase previously below market rents to be in line with current market levels,” the report said.
Analysts have also attributed the rise in rents to the new ruling that mandates government workers to relocate to the city.
Abu Dhabi’s supply pipeline also saw an increase as 1,750 units were completed in Reem Island, Danet Abu Dhabi and Al Reef during Q2. This has pushed up the total stock to around 24,000 units, JLL said.
“The Abu Dhabi market continues to be dominated by government related investment with short-term demand being fuelled by investment and job growth from new major government backed construction projects, such as the Airport expansion, Etihad Rail, Saadiyat Island museums and other major infrastructure, economic and social development initiatives,” said Craig Plumb, head of research at JLL MENA.
“A sustainable recovery requires the government to continue to implement supply controls as many developers are now reviewing schemes that had been placed on hold following the market downturn.
“While new supply is needed – particularly of quality residential product, supply controls are required to ensure the right product is prioritised in locations with existing infrastructure.”
Abu Dhabi’s property prices have been seeing a growth since the start of 2014 with investor interest in off-plan sales also rising.
Property developer Aldar announced that all 223 units in its Al Hadeel project were sold out while its Ansam development sold off units at prices ranging from Dhs1, 540 to Dhs1, 550 per square foot.