Abu Dhabi will see existing residential supply augmented by the handover of 3,500 units and a rush of standalone tower projects during the second half of the year, offering mid-level investors  a wide choice of properties, a report said.Transactional activity improved over the last few months, with purchasers encouraged by a wider choice of available properties, added the H1 2013 Abu Dhabi real estate market by Asteco, a major real estate services company.The report also notes more variety in terms of affordability and growing confidence buoyed by improved market sentiment driven by price increases in neighbouring Dubai.The report cited the handover of residential units at The Gate District, Shams Abu Dhabi and the new tower projects in Beach Towers, Oceanscape and Mangrove Place, as well as the first wave of affordably priced homes located within Hydra Village.“With more units coming on-stream over the next six months and well-established communities offering improved facilities, good quality finishes and attractive leasing prospects, both investors and owner-occupiers are once more eyeing Abu Dhabi for long term investment potential. The ROI  and property appreciation in well defined master development areas holds good promise for the future,” said John Stevens, managing director, Asteco Property Management.However, the report also urges sellers  to be realistic, as recent months have shown a trend towards above market value asking prices, which Asteco says appear to be leading to a slowdown in transactional activity over the coming months.At the higher end of the market, within developments such as Al Bandar, Al Muneera and Al Zeina at Al Raha Beach there are few properties available below Dh1,000 ($272) per sq ft. Prices are also expected to rise as no new competition is being handed over in the area.However, properties on Al Reem Island are expected to remain flat or even record some declines, impacted by potential weight of supply from the delivery of the Gate District and standalone projects.Sales price for apartments  in Al Zeina at Al Raha Beach grew on average by 16 per cent in Q2 2013, and by 23 per cent year-on-year in the second quarter. Reef Downtown experienced similar gains with a 16 per cent increase from Q1 and 20 per cent year-on-year overall, while Al Bandar posted more modest gains of just 2 per cent quarter-on-quarter, and 15 per cent year-on-year.A two-bedroom apartment in Al Zeina currently sells at Dh11,907 per sq m, while the Reef Downtown equivalent is valued at Dh7,106 sq m.Villa sales prices in Al Raha Gardens and Al Reef Villas made impressive quarterly gains on 12 per cent and 14 per cent respectively, against Q2 2102 figures. Whilst Golf Gardens only managed a modest 3 per cent increase.A three-bedroom house in Al Reef Gardens currently costs an average of Dh1.6 million, while three-bedroom villas in Al Raha Gardens and Golf Gardens are priced at Dh2.08 million and Dh2.65 million respectively.Echoing Q1 2013 trends, prime residential developments have also experienced steady rental growth in the first half of the year, fuelled by consistent demand and lack of availability, with resulting rental increases of up to 10 per cent year-on-year (Q2 2012-Q2 2013).High-end communities within the large master plan developments of Al Raha Beach and Al Reem Island report occupancy levels of 65 per cent or more, with Asteco predicting rental rate increases in the mid-term, albeit at a reduced pace.New towers on Al Reem Island are expected to attract interest from tenants seeking out value for money relocation opportunities, with standalone projects potentially requiring attractive lease incentives from private landlords to persuade tenants to make the move.The report notes that the flight to quality continues in the rental market where mid-level property rental rates  have declined over the last 12 months, bottoming out at their current levels. This has also prompted Asteco to reclassify Abu Dhabi’s rental market into newly re-banded tiers with the reclassification modelled using a basket of over 25,000 residential units across Abu Dhabi.“The apartment market, in particular, has undergone considerable change since 2012, as large amounts of better quality supply were delivered. This has meant that projects previously considered high-end are becoming obsolete, and their position in the market reduced to mid- or even low-end status,” said Stevens.