February 7th, 2017 by Own A Space
Mid prime and prime villa’s worth in Abu Dhabi are likely to drop by 15% at least. Similarly, apartments are expected at 7%, according to latest market outlook by Core Savills 2017 report.
Mid-market communities, especially smaller building units are anticipated for maintaining relative sale & rental price resilience and staying flat. 5% of rental margin has been already received mixed reviews and this is a reinstatement as some tenants are apprehensive of the fact that landlords may come in between the law seeing it as an opportunity to increase the rent by 5%, while 3% of municipality fees is payable by expatriates and is adding stress to overall rising household value.
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CEO of Core Savills said that they have seen mainland areas landlords who are not very flexible with negotiating again for better rents thus losing tenants to outer & more affordable areas. However, this form of migration is statistically not reported so much & is artificially feeding the stock in these areas. This might act as a risk for the developers who overestimate the potential demand for outer areas and mid-market communities because of spurious swell in demand from less elasticity in main areas.
Around 2400 units in Reem Island are expected to be in the market by 2017. The extra supply will be tough to absorb & will expectedly cause a noticeable low in rental as well as sales values. Expat tenants will take in some of this stock which is currently renting in the mainland & aspires to be on the Island because of better construction quality and infrastructure and might consider the move because of rental drop rates.
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UAE’s residential property price index for Dec 2016 disclosed that sales prices of Abu Dhabi apartments registered a low in December 2016. Prices decreased 1.05% every month & 2.63% every year. Villa sales prices registered a decrease in December 2016 with prices lowering to 0.74% month to month & 4.99% the year per year.
The outlook of Reidin revealed that registered sale prices of apartments has shown a decline in December reaching low to 0.25% month per month & 0.90% year per year, whereas, villa prices have booked a low in December 2016 falling 0.04% every month but increasing 1.60% year on year basis. Rental prices for the apartment have decreased 4.57% year on year. Villa rental prices have swooped down to 0.15%month to month and also decreased 7.79% year to year.
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