By Staff writer
Biggest declines seen for 4- and 5-bed homes as job losses and oil prices have reduced demand for larger units
Apartment prices in Abu Dhabi declined marginally by 0.5 percent during the third quarter of 2016, taking average annual falls to three percent, according to a new report.
Cavendish Maxwell's report said apartment and villa rents declined by 1.8 percent and 2.4 percent on average respectively, with 4 and 5 bedroom categories seeing the highest declines as job losses and oil prices have reduced demand for larger units.
Rents at Saadiyat Beach Villas declined more than properties at Al Raha Gardens and Al Reef, with 2.7 percent drop in Q3 while yields for villas in investment zones ranged from 4-7 percent during the quarter.
The report also said investment yields for villas in Al Raha Gardens and Al Reef areas continue to remain attractive averaging between 6-7 percent.
Jonathan Brown, head of Abu Dhabi office at Cavendish Maxwell said the preference for smaller, more affordable units is rising in the UAE capital.
“With liquidity pressures on home buyers in Abu Dhabi, demand for smaller units is higher, thus impacting occupation levels in larger units. Developers are also adjusting to this new demand and lining up launches of affordable projects,” he said.
The report said approximately 724 units were completed in Q3, with an additional 5,000 units scheduled for Q4. The key locations for upcoming supply in Q4 are Abu Dhabi city, Al Reem Island and Al Raha Beach, it said.
More than 12,000 units are expected to be added to investment zones between 2017-18, of which nearly 80 percent are apartments, it added.