Average apartment sales prices in Abu Dhabi fell by 1 percent in the first quarter of 2017 while villa prices slumped by 9 percent amid wide-scale downsizing in the emirate, according to Chestertons.
The real estate agency’s Abu Dhabi Residential Market Q1 2017 report also said rents for apartments and villas fell by 3 percent in the same period.
“Sales prices are expected to further decline due to redundancies attributed to the shrinkage of the oil and gas sector. We believe the trend of downsizing or moving to more affordable areas will continue until 2018,” said Robin Teh, UAE country manager, Chestertons MENA.
Ivana Gazivoda Vucinic, head of advisory & research, Chestertons MENA, added: “Sales figures, particularly in the villa market, have been sliding gradually since Q4 2014 further underscoring the quiet sales market in Abu Dhabi. Housing benefit packages have been impacted by cost cutting moves in many companies which may have had a knock-on effect on the villa market.
“Sales prices are likely to continue to ease throughout the remainder of 2017 and into 2018, however we do expect the market to rebound with reinvigorated activity.”
Apartment rents declined by an average of 3 percent in Q1 compared to the previous quarter, according to the report which added that villas also witnessed softening across the board by 3 percent.
According to Vucinic, new supply will hinder the market further, saying: “An additional 4,000 apartments and villas by the end of 2017 will add further pressure to the much-maligned rental market in Abu Dhabi.”