Abu Dhabi residential property rents and sales prices continued to fall in the third quarter as redundancies and new supply hampered demand, according to real estate services firm Chestertons.
The company said in a report that average rental rates were down 3 per cent for apartments and 2 per cent for villas quarter-on-quarter.
“In addition to new developments entering the market, ongoing redundancies and companies offering lower rental allowances are adding further units to the market place and hampering rental rates,” according to the firm.
Apartment rental declines ranged from 1 per cent on Saadiyat Island to 4 per cent on Al Raha Beach, which saw rental rates for studios decrease 30 per cent year-on-year.
For villa rents, Al Reem Island saw a 6 per cent drop for four-bed units but locations including Al Ghadeer, Khalidiya and Khalifa City remained unchanged.
“The shift in market dynamics has resulted in several landlords focusing on retaining tenants rather than facing long periods without any rental income, particularly in a market where we’re seeing some tenants moving to save a few thousand dirhams a year on their rental budget,” said Ivana Gazivoda Vucinic, head of consulting at Chestertons MENA.
Apartment and villa sales prices were down an average of 3 per cent quarter-on-quarter but declines ranged from 6 per cent in Al Ghadeer to 1 per cent on Saadiyat Island.
Chestertons said it expected a Dhs50bn ($13.6bn) stimulus package announced by the government to provide some respite to the market.
“However, until the effects of initiatives such as this are realised, the real estate sector is likely to suffer continued price adjustments into 2019,” Vucinic added.
Listings site Bayut said in its own Abu Dhabi market report released this month that rents for some units were down as much as 12.73 per cent compared to Q2.