Residential property prices as well as rents in Abu Dhabi continued to drop in the first quarter of this year, a new report by consulting firm ValuStrat has found.
Prices were down 18.7 per cent compared to Q1 2017, 12.2 per cent compared to Q1 last year and 3.2 per cent below the previous quarter, the report found.
The weighted average residential value during the quarter stood at Dhs943 per sq ft, with apartments priced at Dhs1,046 per sq ft and villas at Dhs698 per sq ft.
All 10 locations monitored by the valuation-based ValuStrat Price Index (VPI) witnessed single-digit quarterly declines in capital values of less than 5 per cent.
The highest quarterly price falls were registered for villas in Al Raha and Hydra Village, at 4.3 per cent and 4.1 per cent respectively.
On an annual basis, while most areas saw a 12 per cent drop in values, apartments on Saadiyat Island and villas located in Mohamed Bin Zayed City registered a lower drop at 9.3 per cent and 7.1 per cent respectively.
In terms of residential rents, the report found that the rates were down 6.9 per cent year-on-year and 2.1 per cent quarter-on-quarter.
Abu Dhabi’s gross yields averaged 7.1 per cent with apartments seeing 7.4 per cent and villas 6.5 per cent. The average occupancy rate among a sample of 31,073 residential units stood at 77 per cent, the report stated.
“As demand for affordable homes grows, asking sales prices for villas in Abu Dhabi saw a slight uptick of 1 per cent when compared to the previous quarter. It remains to be seen if this trend continues over the coming quarters,” said Haider Tuaima, head of Real Estate Research at ValuStrat.
As far as residential supply was concerned, a total of 4,292 homes were completed during 2018, including 3,365 apartments and 927 villas.
This year, a total of 3,357 apartments and 2,867 villas/townhouses are expected to be delivered. Key expected deliveries this year include 2,315 villas on Yas Island, 2,177 apartments on Al Reem Island, and 763 apartments and 121 villas on Saadiyat Island.