• Apartment and villa/townhouse rents across investment zones have continued to decline in Q2 2018, averaging 5.0% over the last twelve months.
  • An estimated 2,300 residential units have been handed over across investment zones in Abu Dhabi during the second quarter.

Abu Dhabi: Cavendish Maxwell has released its Q2 2018 Abu Dhabi Market Report providing a summary of the residential market activity and highlighting price and movement and upcoming supply of residential properties. The data is provided by Property Monitor, a real estate intelligence platform powered by RICS accredited property professionals. The report also includes a sector focus on hospitality.

Price Performance

According to the Property Monitor Index, villa prices in Al Raha Gardens, Al Reef and Saadiyat Beach have declined by more than 2.5% over the last twelve months, while apartment prices remained largely stable with 1.6% decline on average over the same period. Off-plan transactions continue to dominate market activity, which remains subdued overall. Buyers have shown a preference for the mid-level price

segment and developers are responding with launches at starting prices of AED 500,000 and below. In the secondary market, majority of the sellers were ready to negotiate prices down in Q2 2018. ‘‘Increased participation from a wider segment of buyers will be linked to job creation and enhanced business sentiment. The AED 50 billion stimulus announced for Abu Dhabi in early June is a step in this direction, though the impact on the real estate market is yet to be seen,’’ said Manika Dhama, Associate Partner, Strategic Consulting and Research at Cavendish Maxwell.

Rent Performance

Since the beginning of the year, tenants have had increasing flexibility to either negotiate rents down during renewal or migrate between communities as lower rents and increasing vacancy levels have made historically expensive locations accessible to a wider segment. In May, the municipality fees was increased from 3% to 5% for all premises, except villas for which it has been set at 7.5%. ‘’This monthly charge paid as a percentage of the annual rental contract by tenants is expected to put further pressure on landlords trying to rent larger units, which have been impacted from readjusted housing allowances and job losses among senior executives. Some landlords may reduce the overall rent or absorb this additional charge to attract tenants in an already constrained rental market,’’ said Dhama.

Residential Supply

In Q2 2018 majority of the residential stock was handed over in Abu Dhabi Main Island and City of Lights development on Al Reem Island. As of June 2018, approximately 7,000 units are scheduled for handover for the second half of the year, though actual completions may vary. The key locations for upcoming supply in H2 2018 are Saadiyat, Yas Island and Al Reem Island, which have a total of over 3,700 units scheduled for completion this year.

Notes to editor

Please see the attached documents for the Q2 2018 Dubai Market Report.

Methodology:

Sale prices and rents are derived from Property Monitor (www.propertymonitor.me), a real estate intelligence platform established by Cavendish Maxwell in 2014. Property Monitor provides real-time, market-wide transactional data and trends. Working with governments, agencies, banks, developers and corporate investors, it provides deeper insight into real estate advisory, investment, and lending activities.

The average sales price per sq ft is based on the Property Monitor Index which incorporates signed contracts, registered transactions, valuations and listings verified by Cavendish Maxwell’s market leading valuation department.

Supply projections for residential projects are based on the Property Monitor Supply Tracker which tracks supply in real time, regular tracking of construction projects, new launches and delays. This is achieved through site inspections as well as regular feedback from developers, contractors, Cavendish Maxwell’s building consultancy team and related government entities.

About

Cavendish Maxwell is a highly respected independent firm of chartered surveyors and property consultants, focusing on property services throughout the Middle East and Africa. Established in 2008, Cavendish Maxwell is now one of the region’s most in influential property consultancies, employing over 80 people from offices in Dubai, Abu Dhabi and Muscat.

As a fully qualified member firm of the Royal Institution of Chartered Surveyors (RICS), and with extensive knowledge of the region, Cavendish Maxwell has the necessary experience, expertise and insight to deliver property advice of the highest standard. The company’s reports are used for loan security, audit, insurance reinstatement, dispute resolution, risk management, debt recovery and performance analysis.

For all PR enquiries please contact:

Faisal Zaidi

faisal.zaidi@cavendishmaxwell.com

+971 4 453 9525

© Press Release 2018

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