Abu Dhabi continues to face declines in residential property market performance in the first quarter of 2017 as sentiment remains low, a new report has revealed.
Average prices for prime apartments also declined by 3% in Q1 as a result of increased job losses, reduced government spending, and a decreased sentiment in the market.
According to the Abu Dhabi Real Estate Market Overview report by Jones Lang LaSalle (JLL), approximately 600 units were delivered during Q1 2017, bringing the total residential stock to 249,000 units.
The city is expecting 5,000 more units to enter the market by the end of the year, though Abu Dhabi residents in particular are downsizing to smaller and cheaper apartments due to market uncertainty.
The report does highlight that despite weaker market conditions, development activity continues, although residents are “more mindful of end-user requirements and price sensitivity,” the report said.
Annual residential completions have risen from 2015 levels, but remain much lower than long-term averages due to government supply controls and general caution among developers.
The report highlights that average prime rents of two bedroom apartments in Abu Dhabi have decreased by 5% in the first quarter of the year, mainly due to increased vacancy rates within larger units.