Dubai: Property owners scouting in Abu Dhabi will need to get their timing absolutely right. Wait around and they could see property values spike as and when the full impact of the Dh50 billion stimulus package starts being felt by key sectors in the emirate. The package, announced in June, specifically addresses extended visa requirements as well as encouraging new business owners to be licensed and operate from home.
For now, though, a “majority of the sellers were ready to negotiate prices down in the second quarter of 2018, according to the latest report from Cavendish Maxwell, the consultancy. “Increased participation from a wider segment of buyers will be linked to job creation and enhanced business sentiment.”
In the off-plan space, “buyers have shown a preference for the mid-level price segment and developers are responding with launches at starting prices of Dh500,000 and below”, the report adds. This will be key in getting volumes back up after two difficult years.
In the high-end space, villas in Al Raha Gardens, Al Reef and Saadiyat Beach “declined by more than 2.5 per cent over the last 12 months, while apartment prices remained largely stable with 1.6 per cent decline on average over the same period.”
About 7,000 new homes are scheduled for handover in the second-half of the year, with locations such as the Saadiyat, Yas Island and Al Reem Island likely to take up more than 3,700 units. In the second quarter of 2018, deliveries schedules were fairly steady, at 2,300 units, and most of these being on the Abu Dhabi Island and at the “City of Lights” development on Al Reem Island.
Landlords face new dynamics in rental space
■ Since the start of the year, tenants in Abu Dhabi have had “increasing flexibility to either negotiate rents down during renewal or migrate between communities as lower rents”, according to the Cavendish Maxwell report. “Increasing vacancy levels have made historically expensive locations accessible to a wider segment.”
■ In May, the Abu Dhabi Municipality increased fees from 3 per cent to 5 per cent on all premises, except on the villas for which it is now 7.5 per cent. “This monthly charge paid as a percentage of the annual rental contract by tenants is expected to put further pressure on landlords trying to rent larger units,” the report adds.
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