Abu Dhabi’s real estate market saw a rise in transactions over Q3 2020, with market activity continuing to gain pace following the easing of social distancing measures in May, according to residential property specialist Chestertons' Abu Dhabi Market Report Q3 2020.
Although apartment and villa sales prices continued to fall on average, the rate slowed to 0.6% and 0.2%, respectively. On an annual basis, average apartment prices fell by 4.8%, with villas seeing a decline of 4.7%.
Commenting on this, head of strategic consultancy at Chestertons MENA, Chris Hobden, said: “Abu Dhabi has enjoyed a more active third quarter, with both sales prices and rental rates showing greater stability. COVID-19’s economic impact will undoubtedly continue to weigh on rental rates short-term, with improvements in residential market performance over 2021 largely contingent on a broader economic recovery.”
In the apartment sales market, all areas witnessed a quarterly price change between a 0.8% increase and a 2.1% decrease. Al Ghadeer once again saw the highest rates of decline quarter-on-quarter, falling by 2.1%, followed by Al Reef which witnessed declines of 1.3%.
In contrast, Al Raha Beach and Saadiyat Island saw a slight uptick in average prices. For Saadiyat Island, prices returned to their Q1 2020 average, noting an increase of 0.7% on the Q2 value. Al Raha Beach saw prices increase by 0.8% just below their first quarter average.
In the villa market, prices were broadly stable from the previous quarter, with Al Raha Beach seeing the sharpest quarter-on-quarter fall of 1.4%. Al Ghadeer and Al Reef witnessed slight increases of 0.7% and 0.8%, respectively.
From an annual perspective, all locations studied saw annual price drops of below 5%, other than Al Raha, which fell by 9.5%.
“The sales market has been buoyed by developer incentives and promotions, including extended post-handover payment plans and fee waivers. This, in conjunction with partnerships with banks to provide customers with access to preferential mortgage rates, has served to support transactions,” added Hobden.
Average rental rates continued to fall during Q3, albeit at a lower rate of decline, with apartment rates decreasing by 1% and villas by 0.5%. The highest average rental declines for apartments were seen in Muroor area, where average rents fell by 3.4% on the previous quarter.
This was followed by Al Ghadeer, which saw the second-highest quarterly declines of 2.9%, predominantly driven by the decrease in rents for one-and two-bedroom units.
Khalifa City, Al Khalidiya and Mohammed bin Zayed City saw headline rents hold steady quarterly. Corniche Road performed comparatively well quarter-on-quarter, falling by just 0.3%, driven by a 1.1% fall in average one-bedroom rents.
In the villa rental market, headline rents saw greater stability, with the highest quarterly fall standing at just 1.6%, in Al Khalidiya.
Al Reef and Khalifa City witnessed moderate falls of just 0.5%.
Average villa rents in Al Raha Gardens declined by 1%, with Al Khalidiya seeing a fall of 1.6% quarter-on-quarter. Average rents for three-bedroom units in Raha Gardens fell by 2.8% from the previous quarter.“With household incomes likely to remain under pressure, landlords will need to continue to demonstrate flexibility to both attract and retain tenants over Q4 2020,” Hobden concluded.