July 26th, 2017 by Own A Space
Already existing uncertainty, declining demand, and oversupply are a burden on Abu Dhabi’s residential real estate market. Because of this reasons, the sale prices of these residential spaces have tumbled in Abu Dhabi and has also declined in many districts thus making the UAE’S capital more cheap & affordable.
Abu Dhabi is the center of the oil industry of the country. This dominates the entire economy. The consistent downtrend in crude prices since 2014 resulted in large cuts in this sector’s investments and the consequences for the real estate sectors shows no sign of abating.
Picture Courtesy: en.thegreatmiddleeast.com
The prices are expected to remain under pressure during next year because of no economic sentiment and due to the launch of many new residential projects compounded by less investor confidence. The slacked economic growth of the emirate is expected to have a detrimental effect on the governmental expenses which would result in a decline in property prices created by high vacancy rates because of job loss.
The apartment’s sale prices on an average have got down by 3% during the second quarter of the year. Al Reem Island experienced the great decline of 7%. The only property prices that were increased were of Al Ghadeer by 4%.
The average property sale prices went down by 4% in the second quarter with Khalifa City having the largest stoop of 10%. The above-mentioned ones witnessed the decline of only 2 %, whereas Al Raha gardens fell to 3%. The most expensive remain Saadiyat Island in the neighborhood irrespective of 5.2% decrease.
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Picture Courtesy: homecaprice.com
The story is same in the rental market. The apartment rents decreased by 3% with Al Raha Beach area displaying an extra 1% rise. The 2 bedroom apartments of Al Ghadeer showed a decline of 2%. Al Reem Island decreased by 2.5% and 3.5% respectively.
There was a slide of 2% in the average villa rents having the properties of Al Reef declining by 3.5%. Al Raha and Khalifa villa prices decreased and were more subdued at 0.5% and 1% respectively. According to an expert, they expect to watch the residents continue to downsize their accommodation and move to cheaper areas as companies cut on allowances on accommodations. When the government spending rises, the confidence returns as more public sector jobs are created.
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