Abu Dhabi anticipates 8,500 new housing units annually over 3 years
Abu Dhabi - However, in the last five years, the arrival of housing units in the capital was as high as 11,000 per annum, says a study by real estate consultancy firm CBRE.
Abu Dhabi is anticipating around 8,500 new housing units per annum over the next three years to come onto the market.
However, in the last five years, the arrival of housing units in the capital was as high as 11,000 per annum, says a study by real estate consultancy firm CBRE.
The study said whilst there are clearly some headwinds for the residential market, the low level of expected completions over the next three years will help provide a cushion against the ill effects of the declining commercial market and a slowdown in some other sectors of the economy which ultimately influences demand for housing, says CBRE study.
The Q3 2015 Abu Dhabi MarketView reveals that average residential market rentals whilst maintaining around 2-3 per cent growth over the past quarters, saw a marginal decline of around one per cent quarter-on-quarter, but maintained an annual growth rate of close to eight per cent. The negative impact of the economic slowdown is evidently being felt in the Abu Dhabi residential market, with rents finally being checked after a series of quarterly rental growth, which stretched back to Q3 2013.
Amongst residential property types, smaller units such as studios and one-bedroom apartment units remain in strong demand.
On average, annual rentals for upper middle and high-end properties ranged from Dh60,000-105,000 per annum for studios and Dh85,000-150,000 per annum for one bedroom units.
Mat Green, head of research and consultancy UAE, CBRE Middle East said, "The market is showing some signs of fragmentation, with older and poorer quality apartments - particularly those in secondary locations - experiencing rental declines and these declines have dragged down the performance of the wider market.
"However, residential villas depict a contrasting trend, recording a small increase of one per cent during during the quarter ended September 30 2015. The limited supply, particularly within the main Abu Dhabi island, reinforced the steady performance of this segment."
Prices for more affordable masterplan developments, such as Al Reef and Hydra Village, have remained unchanged during the quarter at Dh8,500 12,375 square meters.
According to CBRE report, the local office market is starting to feel the strain of lower oil prices with declining demand and rentals. With the oil and gas and public sectors serving as the primary office demand generator, demand for office space from both new occupiers and expansion of existing end-users has started to slow.