Sales prices, rents for apartments fell 10% year-on-year in third quarter, according to Asteco
Where Abu Dhabi rents have risen and fallen, Q3 2017
Abu Dhabi’s residential sales prices and rents continued to slip in the third quarter because of job losses, lower housing allowances and increased supply, real estate broker Asteco said on Tuesday.
Sales prices for apartments slid 3 per cent quarter-on-quarter and 10 per cent year-on-year, with the most significant year-on-year drops recorded in Al Muneera and Reef Downtown areas, which plunged 12 per cent.
Around 2,750 units have been completed since the start of 2017, compared with 1,350 for the whole of 2016, and a further 1,500 apartments are expected to be delivered by the end of 2017.
“We are experiencing a weak labour market with reduced employment opportunities and a tightening of housing allowances,” said John Stevens, managing director of Asteco. “This, together with additional supply since 2016 has led to increased vacancy rates which we expect to continue into 2018.”
Average apartment rents dropped 3 per cent quarter-on-quarter and 10 per cent year-on-year, with the steepest declines recorded for mid-market units and large properties within prime and high-end projects.
“Landlords are discounting rents and offering flexible payment terms, (up to 12 cheques) to retain existing tenants and secure new leases,” said Mr Stevens.
Villa rental rates fell 3 per cent quarter-on-quarter and 6 per cent year-on-year, with the steepest declines recorded in Al Raha Gardens, Hydra Village and the larger units within Saadiyat Beach Villas.
While a small number of villas were delivered in 2016, 550 villas have been completed so far in 2017 and a further 250 units are due for handover before the end of this year.
“Rising vacancy rates have been experienced in many villa communities as tenants opted to downsize to smaller or more affordable properties, whilst some even transitioned to apartment units to reduce their accommodation expenses,” said Mr Stevens.