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Wed 29 Apr 2020 02:15 PM

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Rents, sales prices continue to decline in Abu Dhabi

In the rental market, apartments saw declines of 1% while villas fell by 0.6% in Q1

Rents, sales prices continue to decline in Abu Dhabi

Abu Dhabi’s real estate market saw marginal declines in both sales prices and rents during the first quarter of the year, although transactions and mortgage values rose 22 percent to AED 19.2 billion ($5.2 billion), according to newly released research from Chesterstons.

Off-plan sales in a number of sought-after areas – such as Al Reem, Saadiyat Island and Al Reef – collectively accounted for over half of the total transaction value.

Overall, the capital’s real estate market continued to see declines in both values and rents, although at a slower pace than in previous quarters.

According to the Chestersons data, average apartment sales prices declined by 1.2 percent and villas by 1.8 percent quarter-on-quarter.

In the rental market, apartments saw declines of 1 percent, while villas fell by 0.6 percent in Q1.

“Government reforms introduced over 2019, such as the Golden Card residency scheme and the granting of foreign ownership rights across investment zones, have undoubtedly had a positive impact on the capital’s real estate market in Q1,” said Chris Hobden, head of strategic consultancy, Chestersons MENA’

“While we expect recent support packages from both UAE and Abu Dhabi authorities, coupled with landlord relief measures, to go some way to support the real estate market, Covid-19’s impact is set to create headwinds, especially for the rental sector, near-term,” he added.

Hobden added that he believes the greatest immediate threat to Abu Dhabi’s rental sector comes from a rise in unemployment and a fall in income levels for private sector workers.

“Companies have increasingly taken steps to reduce salaries which, in turn, will place downward pressure on rents,” he said. “It is likely that landlords will need to demonstrate further flexibility on both rents and payment terms over the second quarter.”

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