Property sales in Abu Dhabi fell in the third quarter of 2018 as demand fell while residential prices and rents also declined, according to the latest index report.
The data from the Asteco market review also shows that prices have now fallen by 1% quarter on quarter and 8% on an annual basis but there are variations depending on location while off-plan and new properties are more on demand than existing homes.
Prices in Al Reem Island and Al Reef Downtown areas, for example, decreased by 11% year on year while Al Reef Villas and Al Raha Gardens recorded average annual declines of 6% in the third quarter.
Asteco recorded the delivery of around 2,150 residential units in the quarter with 60% located within the Abu Dhabi Investment Zones, including but not limited to Al Reem Island, Al Raha Beach and Yas Island.
Lamar, situated on Al Raha Beach, comprising 430 units, represented the single largest project handed over and in addition, several buildings within the Rawdhat district were also completed, with further inventory expected for delivery over the next six to 12 months.
Although more delays are likely, Asteco projects another 3,100 apartments and villas will be handed over prior to the end of 2018 within the Al Reem Island seeing around 1,000 units, Yas Island and Saadiyat Island 900 units, Abu Dhabi Island 470 units and the rest in Abu Dhabi mainland, including 580 villas.
The report shows that rents continued to fall, with apartment rents down by 3% on average quarter on quarter and by 11% year on year, with the highest declines in middle and lower end properties.
Villa rental rates followed a similar trend, down 1% quarter on quarter and down by 8% year on year. Al Reef Village and Hydra Village registered a more pronounced quarterly drop of 4%.
The falls are the result of new supply and subdued levels of demand, largely attributed to a bearish economic/business outlook. ‘These conditions contributed to an increase in vacancy rates, particularly in buildings with lower quality specifications,’ the report says.