Average residential sale prices in Abu Dhabi rose in the second quarter as the property market showed signs of recovery amid the launch of new villa projects, according to a new report by consultancy JLL.
House prices in the capital rose by 1 per cent, compared with the same period a year ago, while prices in Dubai fell marginally by 2 per cent, the report said.
Villa prices in both emirates jumped as demand for larger homes rose amid the coronavirus pandemic.
Abu Dhabi villas registered an annual increase of 6 per cent in the second quarter while the prices of Dubai units were up 10 per cent.
New villa project launches in Abu Dhabi during the second quarter also had a positive effect on prices, said JLL. The capital's biggest property developer Aldar unveiled new villa developments on Yas and Saadiyat islands, which were sold to customers in record time.
“Looking ahead, we expect outdated existing developments to continue to face pressure, particularly apartment developments, as new developments with larger unit layouts, attractive payment plans and community amenities have a stronger appeal to tenants and investors alike,” said JLL.
In Abu Dhabi, 815 residential units were delivered during the quarter, bringing the total stock to about 267,000 units. An additional 6,360 units are expected to come on to the market by the end of 2021.
Residential stock in Dubai increased to 618,000 units with the addition of 10,000 units during the second quarter alone. Another 36,000 units are expected to be added to the market by the end of 2021.
The UAE's property market continues to recover from the pandemic on the back of new initiatives from the government.
Property prices in Dubai rose by 2.1 per cent monthly in June to Dh924 per square foot (Dh9,945 per square metre), the Property Monitor monthly market report said last week. Since bottoming out in November, prices have risen by more than 12 per cent, it said.
“The recovery still remains uneven between communities with the strongest price increases seen in the market for villas and traditionally sought-after communities. However, we expect the recovery to balance out over the rest of 2021 and switch to a more tenable pace across Dubai,” it said.
The UAE’s hospitality sector is also showing signs of recovery, with occupancy levels rising in Dubai and Abu Dhabi to 58 per cent and 61 per cent, respectively, in the year to May, JLL said.
An additional 12,000 rooms are expected to be delivered in the second half of the year in Dubai to meet demand fuelled by Expo 2020.
Four-star hotels make up 49 per cent of projects that are under construction while five-star properties constitute 37 per cent.