By Andy Sambidge
New report says Abu Dhabi real estate market saw little or no movement in third quarter of 2014
The Abu Dhabi real estate market saw little or no movement on average in residential sales or leasing prices in the third quarter of 2014, according to a new report by Asteco.
While modest price increases and decreases were recorded in localised communities, growing confidence and improved investor sentiment is likely to support sustainable growth in the short to medium term, Asteco said in its Q3 2014 Abu Dhabi real estate report.
Although average apartment sales prices changed little quarter-on-quarter, a 28 percent increase was witnessed annually to the end of Q3.
This trend was mirrored by villa sales prices, which were flat during the third quarter, despite the limited availability of stock, but still achieved an average annual increase of 14 percent across the market.
"The popularity of developments within investment areas is a trend that continues to be simulated quarter on quarter as sales prices firm up. The sales volumes achieved by Aldar on the Ansam and Al Hadeel projects at Al Raha Beach and Yas Island have highlighted the robust demand for the right type of product within Investment Zones," said Jerry Oates, general manager, Asteco Abu Dhabi.
Asteco said the launch of the Mamsha Al Saadiyat on Saadiyat Island, a 400 plus luxury residential project, will act as a catalyst for additional projects expected to be launched in 2015, further outlining the growth potential over the next three to four years.
"Market sustainability will be enhanced still further by a range of new to market developments in 2015, this, combined with a more transparent market for UAE national investors through Abu Dhabi's rental index, which benchmarks and regulates maximum rental increases will encourage future growth in the UAE capital," Oates added.
Rental rates for prime residential apartments in Abu Dhabi remained relatively stable with certain developments such as Sun & Sky Towers achieving close to full occupancy.
Rates in Marina Square witnessed a decrease of 3 percent, as Reem Island became more competitive due to a number of new units coming on line, including The Gate Towers, Aldar's landmark development.
For low end properties on Abu Dhabi Island, including Central Abu Dhabi, the Corniche and Khalidiya/Bateen, a quarter-on-quarter decrease of 5 percent, 2 percent and 4 percent respectively was witnessed, Asteco said.
Investment areas such as Reef Downtown saw no growth quarter-on-quarter however witnessed an annual increase of 26 percent.
Asteco said the rental market for villas echoed that of apartments as high-end villa rental rates remained stable despite limited new supply.
The report also said that Abu Dhabi office rental rates recorded moderate quarter-on-quarter growth of 3 percent for Grade A fitted commercial space whereas 'average quality' Grade B commercial rates remained stable, for both fitted and shell & core.