Sales prices and rents for both apartments and villas are still in decline throughout Abu Dhabi, with little prospect of improvement in the short to medium term, a recent report finds.
According to the latest residential market overview for Abu Dhabi in Q1 2018 from Chestertons MENA, apartment and villa rents fell on average by 3% quarter-on-quarter while sales prices for apartments and villas dropped by 1% and 2% respectively, over the same period.
On average sales prices for apartments decreased 1% compared to Q4 2017, with the highest decline recorded in the Al Reef Community, where prices fell as much as 7% to $251 (AED923) per sqft, followed by Al Reem Island which fell by 3% to $313 (AED1,152) per sqft.
Ivana Gazivoda Vucinic, head of consulting and valuations and advisory operations, Chestertons MENA, said: “Sales prices and rents are expected to face further correction during the rest of this year due to increasing supply encountering weakening demand.
“Overall, the tough macroeconomic conditions and sluggish population growth have both impacted the Abu Dhabi property market over the last few years.
“However even with rising oil prices, other major economic triggers and increased government spending, might still be required to underpin the recovery of the real estate market in the UAE capital,” added Vucinic.
In the rental market, apartments and villas both witnessed declines of 3% on average. For apartments, the highest recorded decline was on Corniche Road, falling 9% across studio, one- two- and three-bedroom apartments.
Mohammed bin Zayed City was the only area to show an average increase in price, predominantly attributed to a 10% hike in studio rents to $8,712 (AED32,000) per annum.
Villa rental prices declined across all areas, with only the Al Ghadeer community showing resilience amid falling prices. A three-bedroom villa in the community remained at $32,671 (AED120,000) per annum quarter-on-quarter.
Mohammed bin Zayed City witnessed the largest average decrease across three-, four-, and five-bedroom villas, at 8%.
Prices for each unit size vary from $33,215 (AED122,000) for a three-bedroom, $38,660 (AED142,000) for a four-bedroom and $43,017 (AED158,000) for a five-bedroom. All other communities witnessed declines of 2% and 4%.