By Courtney Trenwith
Additional 2,000 units expected to come onto the market before the end of the year set to add further pressure
Rents in Abu Dhabi will continue to decline for the rest of the year, real estate consultancy Asteco has said.
Rental prices for apartments fell another 4 percent during the second quarter, while villas lost 1 percent, according to Asteco.
The additional 2,000 units expected to come onto the market over the next six months – on top of 600 that were added during the second quarter – will add further pressure on rents, the consultancy said.
“[This year] will continue to be a challenging year for the Abu Dhabi real estate industry,” Asteco managing director John Stevens said.
During the second quarter, mid-market apartments suffered the most, falling 5 percent, compared to 3 percent for both high-end and low-end.
At the same time, apartment sales values softened 4 percent quarter-on-quarter and 8 percent annually.
Developers’ acceptance of the lower rates has meant sales activity has marginally improved since the beginning of the year, Asteco said. Demand for off-plan developments in popular locations such as Mamshah Al Saadiyat and The Bridges on Reem Island has particularly seen strong transactional volumes.
The decline in sales volumes was across the market, Asteco said. Marina Square was the only area to remain flat quarter-on-quarter, although it declined 4 percent on an annual basis. In other areas, Al Bandar and Al Zeina saw a 6 percent quarter-on-quarter softening, while The Gate and Sun & Sky Towers witnessed moderate declines of 2 percent and 3 percent, respectively.
Sales prices for completed villas decreased by 2 percent quarter-on-quarter and 4 percent annually.
“Several prime and high-end projects such as Jawaher Al Saadiyat on Saadiyat Island and Marina Sunset Bay were launched and recorded good levels of demand due to the overall lack of quality villa developments in Abu Dhabi,” Stevens said.
“In addition, new projects on Yas Island and Saadiyat Island continue to achieve strong demand, supported by existing and planned demand drivers such as schools, leisure facilities and commercial hubs.”For all the latest real estate news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.