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Abu Dhabi’s housing market continued to feel the pressures of weakened demand, sluggish economic growth, and cautious investor sentiment according to the latest Abu Dhabi Residential Market Q3 2017 report from leading international property company Chestertons MENA.
Ivana Gazivoda Vucinic, Head of Advisory and Research, Chestertons MENA, said: “In the first half of 2017, we saw a number economic factors place downwards pressure on the Abu Dhabi housing market including low oil prices, increased stock in the secondary market, a rising cost-of-living and work redundancies.”
“In Q3, these factors continued to steer market performance, while the announcement of new, high-end residential projects, raised caution among investors. However, an expected revival in oil prices due to global stock depletion and renewed government activity thanks to VAT receipts has cast a slightly more optimistic outlook for the market.”
Sales prices on average decreased by 3% for apartments during the third quarter of the year, as prevailing economic factors prompted residents to move more affordable areas such as Khalifa City, Mohammed Bin Zayed City, and Muroor.
Saadiyat Island posted the strongest performance as sales prices increased from AED1,401 per sqft to AED1,415 per sqft. Al Raha Beach posted the largest decline, at more than 5% quarter-on-quarter, as prices in the area dropped from AED1,627 per sqft to AED1,541.
Average villa sales prices fell by 2% in Q3, with Al Ghadeer, falling more than 3% from AED904 per sqft to AED875 per sqft; while Al Raha Gardens declined of just over 1%, with prices decreasing from AED824 per sqft to AED812 per sqft.
The emirate’s rental market demonstrated similar trends, with an overall decline in rental prices of 2% and 1% for apartments and villas respectively. The best performing areas were Al Khalidiya, Mohammed Bin Zayed City, Corniche Road and Muroor, due to the prevalence of affordable units with studio apartments ranging from AED29,000 to AED55,000 per annum.
Meanwhile, across Al Raha Beach, Al Ghadeer, Al Reef, Reem Island and Saadiyat Island, which all posted negative results, a studio apartment ranged from AED39,000 to AED105,000 per annum and three-bedroom apartments ranged from AED110,000 to AED196,000 per annum.
In the villa rental market, Al Ghadeer posted the highest decline in average prices, dropping 8% over the quarter, with negative performance also posted in Mohammed Bin Zayed City, Al Reef and Al Raha Gardens, while Al Reem Beach witnessed flat performance.
This compares to positive trends recorded in Al Khalidiya, where prices increased by an average of 4%, Al Reem Island and Khalifa City, which both posted a 3% increase in prices, raising the average quarterly results.
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