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Value in Abu Dhabi prices

While Abu Dhabi’s real estate market is expected to remain subdued, with price corrections continuing across all sub-sectors this year and new supply outstripping demand, property analysts are optimistic of the capital’s medium-term prospects.

The government’s recent policy reforms and economic stimulus — including a Dh50-billion Abu Dhabi Government stimulus package and Abu Dhabi National Oil Company’s (Adnoc) decision to invest over Dh400 billion in its downstream gas growth strategy over the next five years — play big roles in driving market sentiment.

“Both of these initiatives could filter down to Abu Dhabi’s real estate market in the form of fresh demand for residential property,” said Ivana Gazivoda Vucinic, head of advisory and research at Chestertons Middle East and North Africa. “However, until the effects of these initiatives have been realised, it is likely buyers and tenants will remain cautious.”

Vucinic added: “While we expect the corrections to continue to be a dominant theme in the capital’s residential real estate market – certainly for the remainder of 2019 – due to restrained economic conditions and oversupply, the outlook for the medium and long term for the UAE is encouraging.”

The slowdown across regional and international real estate markets notwithstanding, Mansoor Ahmed, director of healthcare, education and PPP at Colliers, noted that average yields in Abu Dhabi remain relatively high at 5.5 per cent, compared to yields in international markets such as London (2.7 per cent), Madrid (4 per cent), Rome (3.9 per cent), Paris (2.8 per cent), Shanghai (2.1 per cent) and Singapore (2.5 per cent).

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