Cavendish Maxwell report says average residential prices have fallen by 6% over the past year
Activity in Abu Dhabi's real estate market is expected to remain "subdued" this year following a challenging 2018, according to a new report.
Cavendish Maxwell's 2018 Abu Dhabi Property Market Report revealed that in the residential sector, prices continued to decrease last year, with villas and townhouses now costing, on average, 6.2 percent lower than a year ago.
It said apartment prices in the UAE capital also declined by 5.8 percent over the same period, adding that investors have shown growing interest towards lower priced inventory, due to higher expected yields and flexible payment plans offered by developers.
However, many potential buyers continue to wait for the market to soften further during the first six months of 2019, it noted.
Manika Dhama, head of strategic consulting and research at Cavendish Maxwell, said: “Abu Dhabi’s real estate market continued to face challenges in 2018. As flight-to-quality and market corrections continue, we expect activity to remain subdued in H1 2019.
"Meanwhile, investor interest is expected to shift from off-plan products to mid-market ready-to-move stock and residential plots in investment zones, which allow both UAE nationals and expatriate buyers to custom-build homes within their budgets.”
The report also showed that Abu Dhabi’s office sector registered a decline in demand for office take-up and upgrades last year. This was due to limited business growth and low oil prices.
The retail market witnessed strong demand from the F&B sector, however other sectors fared less well, with retail owners offering rent-free periods, flexible leasing terms and rebates to retain tenants in 2018, it added.
Abu Dhabi’s hospitality sector experienced steady growth in demand throughout 2018, the report said, with the total number of guests recorded increasing by 4.6 percent at the end of November compared to the same period in 2017, from 3.87 million to 4.04 million.