The third quarter 2019 Abu Dhabi real estate review issued by leading local consulting firm ValuStrat – reports that Abu Dhabi’s residential capital values were 12.6% lower than last year and 2.4% than the previous quarter. Residential rental values declined at a slower rate of 9.2% annually.
Abu Dhabi capital values were 12.6% lower than the third quarter last year, 29.1% lower than Q1 2016, the base of the VPI (ValuStrat Price Index). The weighted average residential value this quarter was AED 9,505 per sq m (AED 883 per sq ft), apartments stood at AED 10,044 per sq m (AED 977 per sq ft), and villas at AED 7,083 per sq m (AED 658 per sq ft).
All ten locations monitored by the VPI witnessed single-digit quarterly declines in capital values of less than 4%. Apartments in Al Bandar saw marginal quarterly dips of less than 1%, while villas in Mohamed Bin Zayed City saw no change since Q2. On an annual basis, typical apartment units located in Al Reem Island and Al Reef saw 15.4% declines, as well as villas in Hydra Village with 16.2% annual drop.
The third quarter VPI - Residential Rental Values declined 2.4% quarterly and 9.2% annually to 73.8 points. Abu Dhabi’s gross yields averaged 7.4%, for apartments at 7.7% and villas with 6.6%.
“…Abu Dhabi is enjoying relatively high residential yields across the board, this is due to the fact that rental value falls are slower than capital value declines…” said Declan King MRICS, Managing Director & Group Head of Real Estate at ValuStrat.
As far as residential supply was concerned, Abu Dhabi City began with an estimated 233,986 residential homes by end of 2018. So far this year, an estimated total of 1,000 villas and 733 apartments were completed, which is 31% of the projected 5,590 units for 2019 ‘… Relatively modest new home supply in the capital is to be welcomed at this stage in the property cycle, coupled with reports of buyer demand for any sensibly priced stock that is released by reputable master developers - these are both encouraging signs for the longer term recovery and sustained health of the residential property market in Abu Dhabi…’ added King.
Office asking rents in primary commercial districts were up 2.8% QoQ, however, on an annual basis were down 11.6%. The average citywide asking rent for offices sized between 93 sq m (1,000 sq ft) to 186 sq m (2,000 sq ft) fell to AED 840 per sq m (AED 78 per sq ft).
Abu Dhabi City had a total stock of 29,300 keys within a mix of 138 hospitality establishments. Average occupancy rate remained relatively stable at 74%, dipped 0.4% from the previous year. The first half of 2019 saw the Average Room Rate (ARR) and Revenue Per Available Room (RevPAR) jump 10.9% YoY to AED 374 and 10.5% YoY to AED 276, respectively, on foot of various growth drivers during Q1 2019.
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