The first half-yearly market report of 2018 has now been released, delivering some interesting market figures for investors, buyers, landlords, and tenants.
Starting with the leasing trends by Area, Al Reem Island remains on stealing the show with a same good level of demand as in HY2 of 2017, higher than one year back, and almost reached the highest level registered back in HY2 2016, which exceeds all trends since Q4 2015 by 1%. Al Ghadeer, Al Raha Beach, Al Reef Downtown and Khalifa City have slightly increased in demand. Areas such as Abu Dhabi main Island, Al Reef Villas, and Hydra Village show the highest decrease in HY1 since HY1 2015.
These variations are explained by the big drop in the rental prices in Al Reem Island, Al Raha Beach, and Al Reef Downtown, however, areas such Al Reef Villas, even though the drop is there, its demand did not follow the flow. This might be explained by the drop in property selling price, allowing people to move towards a wise decision and purchase a property instead of just paying yearly rentals (figures are explained in the Sales trend section where the demand in Al Raha Beach has gone beyond the previous year’s records).
The second explanation is that Abu Dhabi’s population is looking at affordable properties where facilities and amenities are provided in addition to an island living and City proximity. Tenants are becoming more aware of the real estate lifecycle, they safely calculate and secure the 5% top up on the yearly rentals amount by opting for a less expensive property which allows a safe margin to stick to the allowance budget.
The figures issued for the leasing trends by apartment type reflect an overall stable market flow. However, a small shrink in demand is being noticed for the 1 bedrooms towards the ٍفعيهخس شىي 2 bedroom apartments, the 3 Bedrooms and 4 bedroom apartments kept the same rhythm since 2016.
The leasing trend by apartment type has faced this interesting move due to the rental prices continuous drop in the market, one allowing the population to afford and move to bigger properties; second, tenants became conscious of the fact that owning a property is much wiser – investment wise – than paying rentals to landlords.
The leasing demand of the 4 and 6+bedroom villas has a noticeable increase in demand compared to HY2 of 2017. The 3 and 5 bedroom villas, however, faced a drastic drop. This move can be explained by the attractive rental prices made the tenants, within the same amount, of 3 bedroom villas move to bigger units of 4 bedrooms, and 5 bedrooms towards the 6 bedroom villas.
Moving to the sales demand by area – even with the drop and market slowdown – Al Reem Island continuously occupies the biggest chunk of the market in terms of sales along with Abu Dhabi Island then Khalifa City. The peaks observed in Al Ghadeer and Al Raha Beach are due to the new off-plan projects injected in the market, Al Raha Lofts and Alghadeer Phase II.
By the looks of the latest figures, Abu Dhabi main Land, Al Reef Villas, Hydra Village, and Yas Island have faced an important decrease compared to the figures shown since the HY2 of 2017.
From these figures, we can understand that the buyers’ population is mixed as some of them are looking at luxury and others are looking at affordability. Some of the buyers are end users and other buyers are Investors in off-plan projects.
The sales real estate market trends by apartment type reveal a steady demand for Studios and 1 bedrooms. A slight increase for 2 but a higher move for the 3 bedroom apartments. However, a big drop has been noticed for the bigger units of 4+ bedrooms.
The property purchasers can have two different behaviors in choosing the property based on its size, depending on the purpose. The end users are keener to purchase 2 and 3 bedroom apartments. Investors, however, their investment preference is respectively for the 1 bedrooms, 2 bedrooms then, studio apartments.
Moving on to the sales trends by villa type, the statistics show drastic differences among the properties with the 2, 3 and 4 bedroom villas facing a drastic drop in figures. The 5 bedrooms remain steady but 6+ bedrooms got the highest record in demand as ever.
The smaller villas of 2 bedrooms show a continuous drop in HY2 being compared to the previous quarters, and the 4 bedrooms are losing demand towards the 6+ bedroom villas.
For the end users who are looking at purchasing a villa, we can see two different behaviors. The expatriates respectively prefer the 3 and 2 bedrooms, however, the UAE Nationals prefer 5+, 4 then 3 bedroom villas.
The figures for the Investors behavior are different, where the UAE Nationals have an ascendant preference towards the 2, then 4, 3 and 5+ bedroom villas. The Expatriates, however, are more queen to invest in the 3, 2, and then 4 and 5+ bedrooms.
The overall results show an increase in trends in both Sales and Rents.
It’s obvious that the estate market has been facing a slowdown since HY2 2016; however, a smooth increase is being noticed these last six months. A number of affordable properties are being injected into the market targeting both investors and end users, also relatively low prices are being offered for the existing properties.
The relative decrease in property prices caused by the increasing number of available units on the market, allowed investors to acquire properties with relatively low prices.
This type of recession is the perfect period to invest in real estate where the acquisition cost is relatively low against a good rental income, for the existing projects.
The property prices are forecasted to increase back in HY1, 2019. Now is the perfect time to invest in off-plan projects as the property value will automatically increase once the projects are handed over.
A batch of interesting off-plan projects are listed with Nationwide Middle East Properties with different handover timelines starting December 2017 for Marina Sunset Bay Villas, Faya in Bloom Gardens, Mid of 2018 Mamsha Al Saadiyat, Jawaher, January 2019 for the Fairmont Marina Residences, June 2020 in Al Raha Lofts, Alghadeer in April 2021, and much more, which you can see on www.nwmea.com
The general UAE and in particular Abu Dhabi Property Market is favorable for Buyers – despite the small fluctuations, the market represents an attractive opportunity for investors seeking great returns, making Abu Dhabi property market more accessible for buyers than ever before.
Nowadays, UAE Nationals occupy the bigger part in Real Estate Investment. Conscious that Real Estate in one of the best Investments solutions which generate the bigger portion of return among other kinds of investments, UAE Nationals choose the best and safest option through the attractive property offerings injected in the market.
For more details and inquiries, please feel free to call 80014444 or 0509138969.