Prime housing prices in Abu Dhabi rose by an average of 5 per cent over the quarter that ended in September as the poshest neighbourhoods continued to show signs of recovering from the global financial downturn.
The property consultancy Jones Lang LaSalle said the increase followed a 5 per cent price rise in the second quarter and an 8 per cent increase between January and March.
The consultancy said prime asking prices in the capital had increased to Dh12,100 per square metre at the end of September, from a low of Dh10,200 at the end of last year.
Asking prices for apartments currently stood at Dh14,200 per square metre, while those for villas rose to Dh10,500, Jones Lang LaSalle said.
In Dubai, house prices rose 6 per cent in the third quarter.
However, the consultancy said the increase in prices in Abu Dhabi was restricted to prime buildings in the emirate’s investment areas, and did not represent a market-wide recovery. It said there were no price increases in other parts of the capital.
The price increases also remain well below their market peak. At the end of 2009, Jones Lang LaSalle said the average prime house price was Dh17,222 per square metre – 21 per cent above their current level.
The consultancy attributed the housing price increases to the UAE’s status as a safe haven, a shortage in available homes, and expectations of future price inflation thanks to government infrastructure investment and greater levels of job security.
The consultancy’s report mirrors those from rival firms Asteco and Cluttons, which have reported significant increases in house prices this year.
According to Asteco, prime house prices in Abu Dhabi grew by 14 to 26 per cent in the past year.
Despite new rules requiring Abu Dhabi government workers to live in the emirate to qualify for their housing allowances, Jones Lang said average prime residential rents remained unchanged.
It said average asking rents for prime two-bedroom apartments in the city stood at Dh130,000 – the same level reported at the start of the year.
Jones Lang said rents for secondary housing stock in the city continued to decline as tenants moved to newer developments.
David Dudley, the head of the consultancy’s Abu Dhabi office, said: “In three successive quarters this year, the market has continued to show signs of stabilisation, and in some cases positive growth and recovery.
“The prime residential sales market has proven to be the best performing segment this year, with an increase in transaction volumes and quarter-on-quarter growth in sales prices for prime stock.”
Jones Lang said despite a spate of new hotel openings, hotels in Abu Dhabi recorded a 16 per cent rise in revenue and a 10 per cent year-on-year increase in the number of guests in the first six months of this year, as the hard-hit hospitality market showed signs of stabilising.
Meanwhile, office rents in the capital remained stable during the quarter. However, Jones Lang predicted that new office completions were likely to push rents lower over the coming months.
And despite an addition of 112,000 square metres of shopping space in Abu Dhabi, average rents for shops in shopping centres remained at Dh2,887 per square metre per annum.