Real Estate Market in Abu Dhabi – Q1 2020

Over 8.600 homes in the pipeline this year – a historical annual addition for Abu Dhabi residential market. Despite of an expansive supply, market sentiment in 2020 though is more likely to be driven by demand more than supply. In previous years, the real estate sector was preferably regulated in perspective of demand but new time lays down new rules. With the Covid-19 outbreak in the beginning of the year, causing miscellaneous quarantine restrictions added to fall of oil prices the priorities have been changed and the Government and the developers have taken significant steps to entice demand and to balance the situation.

Stimulus packages came in affect in the middle of March, 2020, so far, the main market trends in Q1 were generally affected and supported by policy reforms introduced in 2019. Here we speak about establishment of 15 freehold investment zones, easing of visa regulations and launching of Golden visa residence scheme. All that is directly linked to property ownership and underpinning investors' concern.

As for Abu Dhabi developers, they have suggested own comprehensive set of measures: restructure of payment plan, relating homes under construction and waiving or reduction of service charges or transaction fee (*that concerns to major developers). In previous years payment plan have implied 5% of property price paid on handover. In 2020 an on-completion installment has grown to 28% (as of Knight Frank's Overview Q2 2020).
Coronavirus in the UAE

Property Sales

Speaking about Abu Dhabi districts there can be marked out several localities with the most intensive market activity stated in the beginning of 2020. These are: Al Reem Island – a unanimous apartments sales leader, Al Raha Beach, Saadiyat and Yas islands, Al Reef, Masdar City, Baniyas and Al Ghadeer.

In the 1st quarter of 2020 we observe a slight decline of purchase prices for apartments in popular freehold areas ranging from -0,4% to -3,6%, if compared to Q4 of 2019. Along with that, one of the key city districts Al Reef shows growth by 0,8%.

Following a well-established in 2019 trend Al Reem Island properties are still the top choice for many customers. An average price per sq ft for an apartment amounted to USD 275 (AED 1.011; RUB 20.742) in the end of 2019 was decreased to USD 248 (AED 911; RUB 18.690) in Q1 2020. The second most popular development to acquire homes a waterfront Al Raha Beach has also experienced decline of property values by 3,6% on average. One-bedroom apartment was priced at USD 311.198 (AED 1.143.000; RUB 23.450.248) in Q1 this year.

Al Reef offers mid-range villas and apartments for sale, which give healthy 8% rental yield on average. In the beginning of the year an average value for one-bedroom apartment made up USD 172.888 (AED 635.000; RUB 13.027.915), if taken as the whole the prices for the apartments grew less than 1% from Q4 2020. Prices for villas stepped a bit higher up by 1,1%.

Yas Island and Al Raha Gardens villas are also well-received, and the prices have been increased by 2,1% and 1,9% respectively. In Q1 2020 one square foot of Yas Island villa was valued for USD 230 (AED 846; RUB17.357), at Al Raha Gardens USD 211 (AED 773; RUB 15.859).

About differences between secondary and off-plan real estate market in Abu Dhabi read here.

Rental Performance

As of Bayut's report, Al Reem Island is the most frequently chosen place for living among renters in Abu Dhabi and the trend persists in the beginning of 2020. Studios at Al Reem experienced price decline -4% in correlation to Q4 2019, but payment for 2-bedroom apartment went up by 2,2%.

Another sought after urban area for renting homes is Khalidiyiah. Yearly payment for a 1-bedroom apartment became higher by 3,5%, for a 2-bedroom unit by 1,5%.

Rental prices for studios and 2-bedroom flats at Hamdan Street and Khalifa City A remained unaffected in early 2020. Analogous costs for Al Muroor and Tourists Club Area residences went about 5% down.

Mohammed Bin Zayed City drew major interest of the renters opting for villas in Q1 2020 and became the most coveted spot for villas search. Yearly rentals were therefore recessed from the end of 2019: 3-bedroom villa -1,1%; 4-bedroom villa -1,6% and 5-bedroom villa -2,7%. Villas at Khalifa City A and B, as well as at Al Reef witnessed downturn not exceeding 3%. On the contrary, rentals for four-bedroom private estates at Al Mushrif, Saadiyat Island, Al Karamah and Yas Island grew by a few points, at Saadiyat Island higher than at all the rest – by 5,6%.

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As it was reported in Chestertons Overview, about one thousand homes were delivered in Abu Dhabi in the 1st quarter of this year.

The greatest quantity of off-plan deals and searches of potential investors refers to popular residential projects: Yas Acres villas and townhouses at Yas Island, Shams Abu Dhabi apartments in Al Reem Island, Jawaher Saadiyat villas and townhouses in Saadiyat Island, Al Maryah Vista apartments and The Gate apartments at Masdar City.

A vast number of residential units are scheduled for completion in the UAE capital current year, but due to pandemic restrictions concerning social distancing and remote working some part of handovers probably be delayed for 2021.


Abu Dhabi property market showed increase by 22%, what is estimated for USD 5,17 bln, on overall sales including mortgage loans in Q1 of 2020 in comparison to the same period previous year.

Real estate transactions are conducted mainly in Al Reem, Al Saadiyat Island and Al Reef. These are off-plan sales and actually that's the main catalyst for Abu Dhabi real estate market by now.