Chestertons: Abu Dhabi real estate market close to bottoming out
Decline in apartment sales prices slowed to 1% in Q3 2019, and apartment rental rates dipped 1% compared to Q2 2019
Downward corrections in Abu Dhabi’s real estate industry slowed down in Q3 2019, with sales prices and rental rates declining marginally compared to the previous quarter, suggesting that the emirate’s real estate market could be close to bottoming out, according to research from real estate services firm Chestertons’ Observer: Abu Dhabi Market Report Q3 2019.
The report states that Abu Dhabi’s average apartment sales dropped 1% in Q3 2019, and villas showed no movement in prices compared to the previous quarter.
The same held true in the emirate’s rental market, where average rental prices for apartments fell 1%, but rates for villas remained the same compared to Q2 2019.
Commenting on the softening of prices, managing director of Chestertons Mena, Nick Witty, said: “There is no significant new supply expected to be delivered next year, which means there could be a better balance between supply and demand.
"This, and a series of government initiatives including allowing foreign nationals to own freehold properties, will ultimately lead to a more stable market as we move into 2020.”
Saadiyat Island saw no price adjustment in Q3 2019, in stark contrast to the 8% quarter-on-quarter decline it witnessed in Q2 2019. Al Raha Beach and Al Reef saw the highest price decline of 2% this quarter, while Al Reem and Al Ghadeer reported a 1% decline compared to the previous quarter.
Bucking the rental decline trend, Mohammed bin Zayed City and Al Raha Beach saw a modest increase of 1% in rental rates in Q3 2019.
Witty added: “Overall, the capital’s real estate sector is showing signs of positive sentiment with a marked slowdown in sales price reductions. Developers are also recognising the need to be more creative to encourage sales and are now offering flexible payment plans and, in several instances, waiving the registration fee.”