Villa and apartment rents recorded a continued decline in Abu Dhabi and Al Ain in Q2 2018, according to Asteco, a property services company.
In Abu Dhabi, apartment and villa rents decreased by two per cent and four per cent in Q2 2018, and witnessed an annual drop of 10 per cent and nine per cent respectively.
The highest drops in the villa rental market since Q2 2017 were registered for Golf Gardens (14 per cent) and Al Raha Gardens (13 per cent).
Apartment sales prices in the secondary market recorded an average annual decline of eight per cent. Al Raha Gardens led the softening in villa sales prices, reporting an average fall of four per cent in Q2 2018.
Speaking on residential sales, John Stevens, managing director of Asteco, said: "Sales in Abu Dhabi remained sluggish, with noticeably low uptake of larger high-end properties. However, off-plan projects with attractive rates and flexible payment plans continued to generate interest."
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Approximately 1,000 residential units were completed in Q2 2018, with the majority of the supply concentrated on Al Reem Island. By end-2018, 5,800 additional residential units are scheduled for handover, mainly in locations such as Al Reem Island, Yas Island, Saadiyat Island, Al Raha Beach and Rawdhat, as well as across mainland Abu Dhabi.
In Al Ain, villa rents fell by an average of seven per cent since Q1 2018 and 12 per cent annually, with a more pronounced drop for larger four- and five-bedroom units, particularly where rates and incentives were not aligned with the market.
Apartment rents decreased by two per cent on average in Q2 2018, although established communities bucked that trend.
Stevens said: "We are witnessing a shift among residents in Al Ain towards high-quality, self-sustained communities with supporting facilities, in contrast to stand-alone buildings and villas that reported minimal interest and high vacancy levels. To attract and retain tenants, landlords continue to offer incentives, including up to one month of free rent and flexible payment terms of up to 12 cheques."
Several projects in the Town Centre and Asharej areas of Al Ain were slated for handover in Q2 2018, but have been delayed and are now expected to be completed by end-2018.
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