Rents in Abu Dhabi take a dip
The UAE's capital has just become more affordable, thanks to a decrease in demand, oversupply of units and economic uncertainty.
According to Khaleej Times, Ivana Gazivoda Vucinic, head of advisory and research, Chestertons Mena, said: "We are expecting prices to remain under pressure throughout the rest of the year due to the flat economic sentiment and the launch of several new residential projects compounded by a lack of investor confidence. The sluggish economic growth of the emirate is expected to have a detrimental impact on government spending which, in turn, could lead to a drop in property prices because of high vacancy rates caused by job losses."
The rental market
Average apartment rents fell by three per cent, with only Al Raha Beach area showing a marginal one percent increase. Al Ghadeer two-bedroom apartments witnessed a decline of two percent. Al Reef Downtown and Al Reem Island declined by 2.5 percent and 3.5 percent respectively.
Average villa rents also saw a slide of two per cent, with properties in Al Reef witnessing a drop of 3.5 per cent. Al Raha and Khalifa villa decreases were less pronounced, at 0.5 per cent and one per cent respectively.
According to Chestertons Mena, apartment sale prices on average decreased by three percent during the second quarter of the year and apartments on Al Reem Island witnessed the greatest decline of seven percent. Properties in Al Ghadeer were the only exception, rising by four per cent.
Average villa sales prices fell by four per cent in Q2, with Khalifa City recording the largest drop at 10 percent. Al Ghadeer and Al Reef witnessed declines of just two per cent while Al Raha Gardens fell three per cent.
Saadiyat Island remains the most expensive neighbourhood despite a 5.2 per cent decline, a Propertyfinder report adds.
Gazivoda Vucinic said: "We expect to see residents continuing to downsize their accommodation and moving to more affordable areas as companies cut back on accommodation allowances. When government spending begins to increase, we can see confidence returning as more public sector jobs are created."
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