UAE – Mubasher: The real estate market in Abu Dhabi may be close to bottoming out as the downward corrections it faced in the second quarter of 2019 have slowed in Q3-19, according to Chestertons MENA’s Q3-19 Abu Dhabi market report.
Sales prices and rental rates in the UAE’s capital have seen a marginal slump in Q3-19, with the average apartment sales price falling 1%, the leading international real estate services firm said.
Moreover, the average rental rates for apartments decreased by 1%, while rental rates for villas remained steady, the report highlighted.
Nick Witty, managing director of Chestertons MENA, 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.”
Apartment sales prices in the emirate eased by 1% quarter-on-quarter during the three-month period ended 30 September 2019, the report remarked.
Saadiyat Island has not experienced any price changes during the quarter, while apartment sales prices at Al Reem and Al Ghadeer contracted by 1% to AED 965 per square feet and AED 740 per square feet, respectively.
Meanwhile, Al Raha Beach and Al Reef have marked the highest price declines at 2% quarter-on-quarter to AED 1,280 square feet and AED 797 per square feet each.
The villa sales prices remained stable in Q3-19 as compared to the previous quarter as prices at Al Raha Beach Area, Khalifa City, and Al Raha Gardens remained at AED 1,160 per square feet, AED 872 per square feet, and AED 700 per square feet, respectively.
However, Al Reef and Al Ghadeer have witnessed modest declines in terms of villa sales prices, decreasing 1% to AED 620 per square feet and AED 695 per square feet, respectively.
“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,” Witty explained.
“We have also seen developers selling land plots to boost revenues. This type of purchase is expected to prove popular with Emiratis however, we could also see this pique the interest of other nationalities if positioned correctly,” he added.
At the level of apartment rental rates, it dropped by 1% overall in Q3-19, with tenants being price-conscious amid the growing demand for affordable communities, the report showed.
Accordingly, Corniche Road and Saadiyat Island have experienced the highest rental declines of 4% and 3%, respectively.
On the other hand, the villa market in Abu Dhabi remained unchanged with no obvious movement in rates during the July-September period of 2019 as compared to Q2-19, with only Al Raha Gardens signaling a decline.
“This underscores the demand trend for more affordable rental options as tenants continue to downsize to save costs, particularly in this area,” Witty indicated.