Abu Dhabi property rates continue decline in Q1 2018
Apartment and villa sales and rental rates in Abu Dhabi have continued to drop in 2018 as more units are expected to be handed over
Apartment and villa sales and rental rates in Abu Dhabi have continued to drop in 2018, declining on average by 3% and 2% since Q4 2017, while recording annual decreases of 11% and 9% respectively, a new report finds.
The UAE Real Estate Report Q1 2018 by Asteco has recorded an annual decline in villa and apartment sales and rental rates across the UAE, with notable drops in the capital.
Apartment sales prices in Abu Dhabi remained broadly unchanged over the quarter, except for Marina Square, Al Reef Downtown, and Sun & Sky Towers, which have seen declines of -5%, and -6%, respectively.
Villa sales prices were stagnant throughout the first quarter, with a slight decrease in Al Reef, which saw a -2% fall.
Annually, the highest decline in sales prices was recorded in Hydra Village at -8%, followed by Al Reef villas at -5%, and Raha Gardens with -4%.
John Stevens, managing director of Asteco, said: “Tenants are increasingly taking advantage of the declining rents across the board, and choose to upgrade from apartments to villas or to better-quality and larger units.
“However, many remain cautious due to economic uncertainties or are waiting for further reductions. People are also moving from older to newer buildings, as these often include parking and other facilities that are non-existent or come at an extra charge in mature buildings.”
Moreover, declines are expected to continue, as the market is expecting several more units to be handed over in the next year.
In Abu Dhabi, approximately 1,600 residential units were delivered in Q1 2018, with over 75% located within the city’s investment zones including Yas Island, Al Reem Island and Al Raha Beach.
More than 7,300 residential units and 100,000m2 of office space are earmarked for completion before end-2018.
However, previous delivery patterns suggest a number of these are likely to be delayed, spilling over to 2019.
Among the key projects handed over in Abu Dhabi in Q1 2018 were Ansam on Yas Island, Al Hadeel in Al Raha Beach and Al Muhaimat Tower on Al Reem Island, in addition to several stand-alone buildings in various locations.
Another project being built, Saadiyat Grove by Aldar and Emaar Properties, falls within the framework of a strategic alliance between the two companies to develop local and international projects worth $8bn (AED30bn).
“The changes reported in these areas are a result of increased competition from new off-plan developments offered at attractive rates and favorable payment plans,” Stevens added.
“Although healthy demand for high-quality, off-plan and newly delivered projects continued, lower-end residential units remained under pressure.”