Abu Dhabi developers have no option but go slow

Dubai: Developers with projects nearing completion in Abu Dhabi are likely to play a waiting game.

The market is forecast to see more than 9,200 apartments (and 3,400 villas) being ready this year, but with the property market and the wider economy still in flux, actual deliveries may tell a different story.

A “phased delivery” of projects is expected to continue, as “developers will align completions more closely with market dynamics to avoid high vacancy levels in completed properties,” states the latest update from the consultancy Cavendish Maxwell.

In 2017, only about 2,200 apartments and 200 villas were handed over, most of which took place in the fourth quarter. They would have brought their own pressures at a time when sales prices of apartments dropped 1.8 per cent across Abu Dhabi’s investment zones. For villas, the declines were by 2.4 per cent in 2017.

And rents were down 3.3 per cent for apartments and 3.7 per cent at villas during the same period.

“The key drivers of price declines in 2017 include the readjustment of employee benefit packages as well as job losses,” according to the report.

The most pronounced rental declines were on Al Reem Island, by 4.4 per cent. Interestingly, of the upcoming supply, about 4,600 apartments are to be on Al Reem Island.

No wonder then developers are not in a tearing hurry to hand over.