Sales of apartments in Abu Dhabi fell by 9% on average in 2018 while villas sales were down by 4%, according to the latest residential real estate report for the Emirate.
Overall, sales activity for completed projects was limited, but off-plan properties offered at attractive rates with flexible payment plans continued to generate interest with some developments achieving high demand levels, according to the fourth quarter report from Asteco.
It shows that then highest falls in apartment sales were recorded in Marina Square and Sun and Sky Towers, both on Al Reem Island while the highest decrease for villa sales was in Al Raha Gardens and Al Reef Villas.
In 2018 the Abu Dhabi Real Estate market continued to follow a similar downward trend as observed over the previous two years and the outlook for 2019 is that the market will continue to soften.
In the residential lettings market, apartments and villas recorded average annual rental declines of 10% and 9% respectively, which the report says was due to increased supply and bearish market conditions.
Demand for office space was limited due to subdued business and employment growth, and as a result, rental rates dropped by 4% on average over the year, although several mid to low-quality commercial buildings recorded decreases of 10% and above, the report also shows.
Conversely, demand for office space in Free Zone areas was more buoyant translating into high occupancy rates.
Although various activities were deferred and will overflow into 2019, Asteco recorded the conveyance of around 6,000 private units in 2018 including 4.500 flats and 1,700 manors and about a portion of this supply was focused on the Islands, primarily Al Reem and Yas Islands.
Around 11,200 private units are foreseen to finish in 2019, and the report says that most of this supply will be conveyed in the speculation zones including 2,350 on Reem Island, 2,500 on Al Raha Beach, 1,300 on Yas Island and 1,250 on Saadiyat Island.
In general, the quantity of new venture declarations is relied upon to be silenced until monetary conditions and market assumption enhance, and new supply is required to apply further weight on rental rates.
‘While a few occupants are relied upon to scale back and look for an incentive for cash properties, others will exploit the expanded decision at lower rates to overhaul,’ the report says.
It includes that interest for office space will stay lukewarm and result in moderate rental rate decays, specific for structures with lower quality details while landowners will keep on offering impetuses as limits on recharging and adaptable installment alternatives.
Asteco likewise figures that business costs will keep on mellowing with the emphasis on aggressive value focuses and appealing installment gets ready for off-plan and about finished activities. ‘While further drops are foreseen for 2019, we trust the rate of decay is probably going to moderate towards the year’s end,’ the report closes.