Apartment rental rates softened4% while villas average2% Q-o-Q; Y-o-Y apartment and villa rates declined 12% and 9% respectively, according to year-end report
Abu Dhabi real estate sales prices and rental rates continued to undergo downward adjustments throughout 2018, albeit at a lesser rate towards the end of the year, indicating that in some locations pricing levels are starting to become more realistic, according to research from leading international real estate services firm, Chestertons, latest Observer: Abu Dhabi Market Report Q4 2018.
Average apartment sales and villa prices fell by 2% in Q4 compared to the previous quarter. The year-on-year performance showed that apartment prices declined, overall, by 9% and villas by 11%. In the rental market, rates continued to soften as apartments saw a further 4% decrease, with a 2% drop for villas from the previous quarter. Annually, apartment rental rates declined by 12% and 9% for villas.
“The rate of adjustment we’re now seeing is slower than previously experienced, which we believe is an indication that prices have reached more realistic levels in several areas of the capital. Prices are expected to continue to soften in 2019 as 11,000 units are estimated to be delivered, ensuring Abu Dhabi remains an even greater buyer-friendly market over the next 12 months,” said Ivana Gazivoda Vucinic, Head of Consulting, Chestertons MENA.
Apartment sales prices in Al Ghadeer, for the second quarter in a row, witnessed one of the biggest price adjustments, declining 5% Q-o-Q to AED822 per sqft, a 16% decline when compared to 2017. In Al Reef, prices fell by 2% Q-o-Q to AED880 per sqft while in Al Raha Beach, apartments remained the most resilient, dropping by just 1% from the previous quarter to AED1,450 per sqft.
From an annual perspective, Al Reef (11%), Al Reem Island (11%) and Al Raha Beach (5%) all saw price declines, with only apartments on Saadiyat Island witnessing no change in average sales prices from 2017 selling at AED 1,425 per sqft in Q4 2018.