Abu Dhabi’s real estate market experienced a further drop of 1% in the sales prices of apartments and a 2% decline in the sales prices of villas. In terms of apartment sales prices, the highest drop was recorded in the Al Reef Community where the prices declined by 7% reaching AED 923 per sq.ft. Similarly, villa communities in the Al Raha Beach area experienced the highest drop of 10% with average sales prices declining to AED 1,150 per sq.ft.
The rental market declined in Q1 2018 compared to Q4 2017 as rents for both villas and apartments weakened by approximately 3% on avearge. Recent redundancies and the declining housing allowances coupled with increased supply are putting downward pressure on rental levels. Apartments on the Corniche Road recorded a 9% decline in values over the past quarter, while Mohamed Bin Zayed City was the most affected area in terms of villa rentals, which dropped by 9%.
Despite the continuing downward trend in residential rents and sales prices in Abu Dhabi, developers continue to launch new schemes. Some of the most notable recent launches are the Reflection project on Reem Island, Al Ghadeer Plase 2 by Aldar, Pixel on Reem Island by Imkan and the new development between Yas and Saadiyat Island to be developed by Al Fahid.
Sales prices and rents are expected to face further correction during 2018 due to the weak demand and the increasing supply on the market. Major economic triggers and the increased Government spending would be required to underpin the recovery of the Abu Dhabi residential market.