TRADE REDUCTIONS HAVE NEGATIVE IMPACT ON ABU DHABI PROPERTY MARKET

The downsizing of several large companies, limited economic growth and a number of trade mergers is having a negative impact on Abu Dhabi's real estate demand.

According to the most recent analysis from real estate firm Asteco, rental values for apartments have fallen by an average of 17% since 2015, and the decline is continuing the plague the market.

Around 5,000 units were delivered in Abu Dhabi in 2016 and 2017 which put a damper on demand for completed projects and in turn caused a downturn for the rental and sale markets.

By 2017, limited economic growth translated into job cuts, and limited new employment opportunities which has had a further impact on the property sector.

This decline has been most prominent for high and mid-quality properties with data showing that average quarterly rents for apartments fell by between 2% and 3% during 2017, while price falls ranged from 2% to 4%.

In 2018 rents and prices are expected to follow a similar pattern, and record moderate declines as a result of the continuous delivery of new supply during a period of moderate economic and market growth.

However, experts remain optimistic about this increase in offerings for the future, with 9,000 residential units, including 6,200 apartments and 2,800 villas and townhouses are anticipated for completion this year, predominantly within the districts of Reem Island, Al Raha Beach and Yas Island.

"Off-plan quality projects offering attractive sales prices and payment plans will continue to benefit from good levels of demand and ultimately increase investment in the real estate sector," says Ghada Amhaz, mananger of reseach for Abu Dhabi at Asteco.