According to Asteco's Q1, 2021 UAE Real Estate Report, amid persisting economic issues and COVID-19 worries, villa market rental prices in Abu Dhabi and Dubai remained solid, driven by a spike in demand among well-developed villa communities – established and developing.

During the first quarter of 2021, the Abu Dhabi residential market produced roughly 1,700 apartments and 50 villas, with a surge in demand for villas, notably inside well-developed villa complexes such as Yas Island, Al Raha Beach, Saadiyat Island, and the Al Reef neighborhood. While average villa rent prices stayed relatively steady in Q1 2021, rentals for West Yas, Golf Gardens, and Saadiyat Beach Villas increased significantly.

As per the research, demand for finished villas for selling stayed high in Q1 2021, owing mostly to the restricted supply of high-quality residences at reasonable rates. Cheaper places like Al Reef have also seen increased demand, resulting in a 7% increase in quarterly sales prices. Owing to the low demand in this sector, apartment selling rates have stayed relatively stable over the previous three months.

Even though the typical rental market for residential properties stayed currently stable in Q1 2021, with a huge majority of renters wanting to improve or upsize due to greater accessibility in the mid to high-end sector and the continuous incentives given by landlords, the office sector remained one of the most difficult asset classes in the Emirate. Landlords also were increasingly providing payment and lease term incentives.  Several Grade A and B office buildings have seen an upsurge in demand from Chinese and Israeli enterprises wishing to establish a foothold in Abu Dhabi.

As per the survey, no large-scale villa developments were completed in Dubai within the first three months of 2021, but apartment supply remained at approximately 2,000 units, with major deliveries in growing communities like Dubai Hills Estate and Dubai Creek Harbour. At 70,000 square feet, office completions were modest.

The rental business in Dubai for flats and villas improved in the first quarter, with average rental prices increasing by 1% and 4%. Rates for apartments and villas were 10% and 2% lower when compared to the similar time last year.

Improvements in working and living patterns can be contributed to the increase in demand for villas. Office rental prices dropped sharply, with quarterly and yearly decreases of -3 % and -18 %, respectively.

Similarly to the rental market, the current scenario now has different degrees of impact on sales prices, with an average quarterly gain of 3% for flats and 6% for villas.

Although investment buildings (educational, hotels, and offices) have experienced reduced activity, the villa category has experienced significant growth. For example, throughout the quarter, villa selling prices in Arabian Ranches, Meadows, and Springs increased by 9% on average. Apartment sales performed better too, with quarterly rises of 5% in Jumeriah Village and Dubai Sports City.

Tenants taking advantage of cheaper rental prices in Al Ain increased Real Estate market activity in Q1 2021.

Apartment rental prices in the Northern Emirates were more or less unchanged in Q1 2021, with a 1% drop for high-end homes in Ras Al Khaimah (RAK) and Fujairah. Sharjah's apartment sales prices grew by 3% in the previous three months, whereas RAK saw no change.

The analysis stated that the exceptional COVID-19 scenario has affected various parts of the Real Estate industry differently, down to (sub) category/segment levels, with the ambiguity of when conditions would stabilize and how transactions volumes and prices will be impacted.

Asteco is a prominent regional and worldwide award-winning full-service real estate services firm founded in 1985 that has earned significant respect for constantly offering high-quality, professional, value-added real estate solutions fairly. The corporation is also well-known for its role in many of the projects that have established the UAE's landscape and architectural infrastructures. The world-class firm has a distinct and significant blend of local knowledge and worldwide competence, and it is well-known for its use of cutting-edge technology tools and innovations, dedication to openness, successful tactics, and professional expertise.

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