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Nearly 8K residential units set to enter Abu Dhabi market

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.

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Prime Properties Are Holding Their Value In Dubai

Dubai’s prime properties are losing their value much more slowly than other segments of the city’s real estate market.

According to Knight Frank’s Prime Global Cities Index for Q2 2018, the average value of prime properties in Dubai fell just 0.8% year on year between June 2017 and 2018. Between March and June 2018, prices were down 0.6%.

Prime property is defined as the top 5% of the housing market in a city.

The small decline in prime values contrasts with big declines in the overall Dubai property market.

Asteco reported that average villa and apartment sale prices fell 4% percent between March and June 2018, and by 11% between June 2017 and 2018.

Forty-three cities were covered in the Q2 index and Dubai was one of 11 where prime values fell year on year. The greatest increases in prime values were seen in Guangzhou, Singapore and Madrid, which achieved double digit percentage growth over the 12 months. As a whole, however, the index recorded its weakest rate of annual growth since 2012 (2.6% overall).

“The introduction of new, and the strengthening of existing, property market regulations, along with the rising cost of finance and a degree of political uncertainty is resulting in more moderate price growth at the luxury end of the world’s top residential markets,” noted Kate Everett-Allen, the report’s author.