In a new report, ValuStrat noted that apartment and villa asking rents fell 9.4% and 8% respectively
Apartment and villa asking rents and sales prices fell in both Dubai and Abu Dhabi throughout the 1st quarter of the year, with the ongoing coronavirus pandemic posing a challenge to the UAE’s real estate sector, according to new statistics from ValuStrat.
In a new report, ValuStrat noted that apartment and villa asking rents fell 9.4 percent and 8 percent, respectively.
In nearby Abu Dhabi, asking prices for apartments fell 2.5 percent quarterly, and were 5.9 percent lower than in the same period last year. For ready villas, the average asking price of AED 876 per square foot indicated that prices fell 1.6 percent quarterly and 12.1 percent annually.
On a quarterly basis, Q1 2020 saw cash sales of ready homes up 30.4 percent annually, with no change quarterly. Even as the impact of the covid-19 pandemic began to be felt in the second half of March, the month was considered the best Q1 for ready home cash sales since 2014.
Off=plan home sales also grew 18.2 percent annually, although this still represented a drop of 26.3 percent when compared to Q4 last year, largely as a result of developers limiting new project launches because of oversupply concerns.
In April – as stay-at-home measures were put into place - cash sales transactions were just half those of March, while ready home sales fell 74 percent and off-plan home sales fell 32 percent compared to the previous month.
Looking forward, ValuStrat said that in the medium term, tenants are likely to renew lease contracts.
“With the falling rents trend observed in the last few years, tenants were anticipated to look out for new areas which could offer better value for their money,” the report said.
“However, we do now expect a possible near-term rush of pent-up activity, with the possible more negative forces being felt in downward price pressures in the medium term onwards,” it added, noting that such downward pressure will be the result of salary reductions and job losses.