By Bernd Debusmann Jr
Residential sales prices in Abu Dhabi fell by 7.5%, compared to 6% in Dubai
Residential sales prices continued to fall in both Dubai and Abu Dhabi in 2019, ahead of a massive influx of deliveries expected this year, according to a new report from Knight Frank.
According to the report, residential sales prices in Abu Dhabi fell by 7.5 percent, compared to 6 percent in Dubai.
The report noted that Dubai’s residential market is showing “very early signs of recovery as we begin to see a sustained increase in transactions volumes". Initial data releases show that residential transaction volumes in 2019 increased 26 percent compared to 2018.
However, Knight Frank said that the delivery of upcoming supply “is the most significant headwind facing the UAE’s residential market” in 2020.
In 2020, 8,500 units are expected to be delivered in Abu Dhabi – the most since 2013. In Dubai, almost 62,500 units are due for completion.
“Whilst we are unlikely to see this entire pipeline come to fruition, the quantum of stock set to be delivered is likely to be the highest since 2008,” Knight Frank said in a statement.
Knight Frank believes that while in the medium term the influx of supply will continue to put pressure on prices and rents, a number of measures have been implemented that will contribute to the strong fundamental offering of the UAE’s property market.
“Whilst performance in the UAE’s real estate sectors has continued to soften on average, we have begun to see performance in certain market segments and asset grades begin to fragment,” said Knight Frank Middle East associate partner Taimur Khan.
“More so, the introduction of a range of regulations to increase the ease of doing business and balance our supply and demand will enhance the fundamental offering of the UAE’s property market and in turn enhance confidence from developers and investors.”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.