Dubai: With the market in full revival mode, off-plan launches in Abu Dhabi seem to be taking place only at the top-end of the pricing spectrum. The best part is that such a laser-sharp focus on the part of developers is pulling in buyer interest in sufficient numbers.
The third quarter saw the Tourism Development & Investment Company (TDIC) launch 461 super-premium homes at Saadiyat Island’s Cultural District. With the neighbourhood set to feature the likes of Louvre Abu Dhabi, Zayed National Museum and Guggenheim Abu Dhabi, the developer had set a price tag of around Dh21,500 a square metre, “higher than the overall market average of around Dh15,750 a square metre”, according to CBRE’s update on the Abu Dhabi’s realty market in the third quarter.
That is also considerably higher than the average sales values of Dh13,725-Dh17,760 a square metre attained in key investment locations of the city. The recently released penthouses at the Gate Towers on Shams Abu Dhabi (Reem Island) recorded average prices of around Dh17,200 a square metre for unit sizes of 430 to 614 square metres.
But for those investors looking to get in now, there is still respite from the fact that the rate of increases has subsided. “While the third-quarter produced a relatively subdued performance, improvements in both sale and lease rates are likely to continue, albeit at a steadier pace than was evident during the first-half of the year,” said Mat Green, Head of Research and Consultancy at CBRE.
According to the firm, over the past six quarters average home prices at key investment locations were up by nearly 22 per cent. But specifically, during the third quarter, the gains were limited to 3 per cent.
However, the momentum build-up in Abu Dhabi is not happening because investors are looking for an alternative to Dubai. “It’s not as if they see values for high-end properties in Dubai’s as having no further room for growth – the recent gains in Abu Dhabi has largely been created by that market’s internal dynamics,” said Niraj Masand, Partner at the property services firm Banke M.E. “Also, all of the off-plan releases have been in the premium to super-premium space, with prices around Dh2,000 a square foot, and for very large floor areas.”
Going forward, for more transparency on pricing, the much anticipated “price index” can offer a solution. But there will be acceleration in the further fragmenting of the residential space, with “well-located and well positioned properties able to outperform the wider market”, according to CBRE.
