Property prices and rentals in Abu Dhabi continued to decline in the third-quarter and the trend is likely to continue in fourth quarter and early next year but some areas could see recovery, according to industry executives and analysts.
John Stevens, managing director, Asteco, said over the third quarter in Abu Dhabi, residential rents continued to soften mainly due to new supply and reduced levels of demand, largely attributed to a bearish business outlook.
"Apartment sales prices witnessed a marginal decline of one per cent over Q3 2018, mainly due to the limited demand for completed units available within the secondary market, translating into low transactional volumes. However, off-plan and newly completed properties fared better and continued to generate interest, he said, adding that Khalidya/Bateen, Saadiyat Beach, Corniche, Al Reef and Hydra Village recorded the highest declines in rental and sales rates.
"The decline in rental and sales rates are expected to continue into Q4 2018 and early in Q1 2019," Stevens said.
According to Asteco figures, 2,450 apartments were completed in the first-half and another 1,700 in the third-quarter of 2018. While the fourth-quarter will also see addition of another 1,500. While 670 villas were delivered in the first three quarters. But the fourth-quarter will see a huge addition of 1,600 new villas in Abu Dhabi, forecasts Asteco.
Sudhakar Rao, chairman, Gemini Property Developers, said as oil prices continue to rise, house prices and rents will recover next year.
"As the emirate's grows and with diversification creating new employment, the residential property sector will witness a solid rebound and growth," he said.
Mostly the city centre and new neighbourhoods, according to Rao, such as Saadiyat Island, Al Raha Beach area, Yas Island, etc as well as the new clusters being creates in between Dubai and Abu Dhabi - such as Al Ghadeer areas - that help working couples working in two cities and live midway will see stronger demand than other areas of the emirate."
Haider Ali Khan, CEO of Bayut, said Abu Dhabi has followed suit with the Dubai property market and the price trends in the capital suggest a stabilisation of prices, which is apparent from the less exaggerated changes since the last quarter.
"It's refreshing to see sales picking in certain areas of the capital showing investor confidence in the emirate," he said.
John Stevens of Asteco said several behaviour patterns have been observed among residents across the country and contribute to the Abu Dhabi property market.
"These trends include downsizing rental units, seeking value-for-money properties and moving into less-established areas. As well as, tenants are seen taking advantage of the sustained rental rate downturn and using this opportunity to upgrade to larger units with better-quality specifications, located in more popular areas," Stevens added.
Sudhakar Rao said oil prices are a key driver and this is supported by economic diversification activities by the emirate of Abu Dhabi. Besides, the new destinations being created by Abu Dhabi Government, especially amazing attractions such as Warner Bros Abu Dhabi, Yas Island, Ferrari World Abu Dhabi, Saadiyat Island, etc, will continue to attract tourists. Etihad Airways transportation routes that manages and to brings passengers to Abu Dhabi and promote tourism, will also assist the hospitality sector which contributes to the well-being of the economy.
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