Around 3,200 freehold residential units were handed over in Abu Dhabi in Q3, with around 7,700 scheduled for handover in the next six months.
According to Cavendish Maxwell, the majority of the residential stock, including both apartments and villas/townhouses, were handed over in Al Reem Island, Al Reef and Al Raha Beach. The key locations for upcoming supply are Saadiyat Island, Yas Island and Al Reem Island.
Meanwhile, investors in Abu Dhabi’s freehold property market are being cautious and taking their time over purchases, according to Cavendish Maxwell’s Q3 2018 Abu Dhabi Market Report.
‘According to the Property Monitor Index, apartment sales prices in investment zones have declined by 2.7% on average over the last 12 months, whereas prices declined marginally by 1.7% over the quarter. Villa/townhouse sales prices also followed a similar trend, with quarterly and annual declines on average of 2.8% and 4.2%, respectively,’ the chartered surveyor and property consultant wrote in its latest report.
Softness at the higher end of the market has resulted in more launches targeting the middle segment, according to Cavendish Maxwell. Pixel Towers in Al Reem Island was launched by Imkan in Q4 2017 with studios starting as low as AED 560,000. Among more recent launches was the Al Ghadeer Phase II by Aldar with studios starting as low as AED 350,000 and two bedroom villa/townhouse prices starting at AED 1 million.
According to the Property Monitor Index, residential rents in freehold areas have registered a 12 month decline of 5.6% on average, where apartment rents in Al Reem Island and villa/townhouse rents in Al Raha Gardens and Saadiyat Beach declined by more than 6%.
One bedroom apartments on Al Reem Island can now be rented at AED 84,000 on average, with rents for this unit type declining by 6.2% over the last 12 months. Three bedroom villa/townhouse in Al Raha Garden are being rented for AED 150,000 on average, an annual fall of around 6.2%.
‘Meanwhile, tenants continue to be spoilt for choice and are migrating to communities and buildings with superior facilities, thus putting further pressure on older stock,’ Cavendish Maxwell noted.