Sale and rental prices for residential property in Abu Dhabi are expected to continue to fall this year as the emirate’s shrinking oil and gas sector impacts demand, according to Chestertons MENA.
In its Q1 report the company said apartment sales prices were down an average of 1 per cent and villas prices decreased 9 per cent during the first thee months of the year.
The largest decreases for villas were seen in Al Ghadeer, Al Reef and Khalifa City, where prices dropped Dhs915 per sqft, Dhs897 per sqft and Dhs747 per sqft.
For apartments Al Gadeer saw a decrease of 3 per cent to Dhs1,009 per sqft and Al Raha Beach was down 1 per cent to Dhs1,601 per sqft but AL Reef Downtown bucked the trend with an increase of 1 per cent to Dhs984 sqft.
“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, when an expected increase in government spending could improve market sentiment,” said Robin Teh, UAE country manager at Chestertons MENA.
Apartment rents were also down an average of 3 per cent quarter-on-quarter with declines of 6 per cent and 4.5 per cent seen in Al Reef Downtown and Al Reem, according to the firm.
Similarly vila rents were down an average of 3 per cent with those in Al Reef, al Raha Gardens and Khalifa City seeing decreases of between 1 and 7 per cent.
Gazivoda Vucinic, head of advisory and research at Chestertons MENA, said new supply would continue to hinder the market further with an estimated 4,000 apartments and villas to enter the market this year.