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Wed 9 Jul 2014 02:02 PM

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Abu Dhabi apartment prices up 4% in Q2, says Asteco

New report highlights slowdown in transaction volume and more sustainable levels of rental and capital appreciation

Abu Dhabi apartment prices up 4% in Q2, says Asteco
Skyscrapers stand on the skyline viewed from the Central Market in Abu Dhabi, United Arab Emirates, on Wednesday, Jan. 11, 2012. Abu Dhabi, the oil-rich sheikhdom that spent 36 billion Dirhams ($9.8 billion) bailing out its biggest developer in 2011, will probably reach for its checkbook again as property companies in the United Arab Emirates face a stalled market and deadlines to repay debt. (Credit: Bloomberg News)

Average apartment sales prices in Abu Dhabi rose by four percent during the second quarter of 2014, Asteco said in a new report on Wednesday.

A slowdown in transaction volume and more sustainable levels of rental and capital appreciation defined Abu Dhabi’s residential sector performance in the three months to June, according to Asteco’s Q2 2014 real estate report.

On average apartment sales prices increased by four percent quarter-on-quarter, and 29 percent since Q2 2013.

Asteco said villa sales prices remained relatively stable over the same period, showing an average increase of just two percent.

Average apartment rental rates ran in parallel with villas recording modest Q2 growth rates of up to eight percent, Asteco said.

“Ongoing tenant preference for newer, master planned communities drove demand for apartments in prime developments within investment areas, while affordable villa locations continue to be popular,” said Jerry Oates, general manager, Asteco Abu Dhabi.

“Market sustainability will be further buoyed by Abu Dhabi’s plans to launch its own rental index this year, designed to create a more transparent market for UAE national investors, regulating maximum rental increases,” he added.

Asteco added that growth for low to mid-end apartment unit developments, such as Reef Downtown, dropped two percent in Q2, suggesting that prices reached a peak in Q1.

Abu Dhabi office leasing figures recorded moderate quarter-on-quarter rental growth of three percent for Grade A fitted commercial space whereas ‘average quality’ Grade B commercial rates remained stable, for both fitted and shell and core, the report said.

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