Saturday, January 06, 2018
As per Chestertons MENA, Abu Dhabi’s housing market continued to wither during the third quarter of 2017. This was due to the remarkable fall in demand, slack in economic growth, and a rising sense of caution among the investors.
According to the property company's latest Abu Dhabi Residential Market Q3 2017 report, the average sales prices decreased by 3 percent for apartments during this third quarter. It stated that the drastic economic factors led the residents to move to more affordable areas such as Khalifa City, Mohammed Bin Zayed City, and Muroor.
Saadiyat Island displayed the strongest performance as sales prices increased from AED1, 401 per sq ft to AED1,415 per sq ft. On the other hand, Al Raha Beach displayed the largest decline, exceeding 5 percent quarter-on-quarters. Also,the average villa sales prices declined by 2 percent in Q3.
Ivana Gazivoda Vucinic, the head of Advisory and Research, Chestertons MENA stated that they saw certain economic factors to 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, all in the first half of 2017. In Q3, these very factors continued to control market performance. At the same time, the announcement of new, high-end residential projects raised caution among investors. However, a relatively more optimistic outlook for the market has been cast due to certain factors. These magical factors include an expected resurrection in oil prices due to global stock depletion and renewed government activity due to VAT receipts.
The emirate’s rental market indicated similar trends. The rental market experienced an overall decline in rental prices of 2 percent and 1 percent for apartments and villas respectively.
Al Khalidiya, Mohammed Bin Zayed City, Corniche Road and Muroor were the best performing areas. On the contrary, Al Raha Beach, Al Ghadeer, Al Reef, Reem Island and Saadiyat Island posted negative results.
As far as the villa rental market is concerned, Al Ghadeer posted the most remarkable downfall in average prices, dropping 8 percent over the quarter. Similar kind of negative performance was also posted in Mohammed Bin Zayed City, Al Reef and Al Raha Gardens, while rents in Al Reem Beach showed level surface.
As per Chestertons, positive trends were recorded in Al Khalidiya, where prices increased by an average of 4 percent. Al Reem Island and Khalifa City both posted a 3 percent increase in prices, raising the average quarterly results.
Source: Arabian Business