UAE's real estate transactions high 5%
The real estate sector has acted as an added down-drag with property prices moving southbound
The Abu Dhabi Municipality announced that total real estate transactions (covering both mortgage and sales) reached Dh43 billion in 2011, up 5 per cent from the previous year.
“The UAE economy is still suffering from the detrimental spill of the global financial crises and the internal liquidity and debt maturity holdups. “The real estate sector has acted as an added down-drag with property prices moving southbound and market activity is relatively muted. As a general trend, we expect this pattern to dig into 2012,” said a report by Kuwait-based Global Investment House.
CB Richard Ellis said in its latest report, average residential rents in Abu Dhabi fell 3.5 per cent from the previous quarter and 18 per cent year-on-year “as the sheer number of newly completed units took its toll on both rental rates and occupancy, with deflationary pressures anticipated to continue across the capital as additional stock is delivered over the next 12 months”.
“For strata developments, rental fluctuations are often found to be even more acute with the presence of multiple landlords in the same building creating fierce competition. “Owners are also pushed to lease properties at lower rates in order to prevent the long void periods occurring, subsequently benefitting occupiers across the market,” the report said.
Abu Dhabi’s expanding residential offer is providing tenants with a more abundant array of new good quality products. An increasing number of high-end residential properties is now being completed along the Corniche, Saadiyat Island and Raha Beach. Upcoming projects include Nation Towers and Landmark Tower, adding to recently delivered luxury residences from Ettihad Towers and St Regis Apartments.
The transactional market remained constrained during the first quarter with sales prices for freehold units on Reem Island and at Al Raha Beach starting from around Dh950 per square foot, while rates for Al Reef Downtown were posted from as low as Dh475 per square foot. Prices for completed properties remained relatively stable, whilst those still in the early stages of construction continue to fall away amidst weak demand for riskier off-plan products.
In the hope of creating more market interest, a number of financial intermediaries have announced reduced mortgage rates, whilst many developers are now offering flexible payment terms and more creative products (e.g. rent-to-own schemes) in order to attract buyers.
Market transactions are being driven predominantly by occupiers, with very low investment activity being recorded.
With a significant inflow of new properties occurring during a very short period, occupiers continue to enjoy a growing spectrum of choice across various locations and budgets. However, the outlook for the capital’s landlords is not so upbeat. Heightened competition in the market place means owners face a growing battle to preserve healthy occupancy rates.
- Nip, tuck: Dubai's grand plans for being a major player in medical tourism
- Zain, UNHCR, Facebook to bring free internet access to urban refugees in Jordan
- Yemen Central Bank headquarters to relocate from Sanaa to Aden
- IMF report details the crippling economic effects of conflict in MENA
- Start Up Lebanon entrepreneurs head to Silicon Valley Roadshow
- Dubai: Increased real estate transactions may signal economic recovery
- High Demand, High Liquidity: Kuwait's real estate sales reach $1.1 Billion in June
- TASWEEK: UAE property continues asset price, transaction volume & capital increase in Q1 2014 following Q4 2013 growth
- Real estate transactions decline in Lebanon
- Anticipated Increase in Mortgage Availablity in the Capital Expected to Improve Transactional Volumes in the Short Term