Abu Dhabi’s real estate market faced key challenges last year and with flight-to-quality and market corrections continuing this year as well, the market activity was likely to remain subdued during the first half of 2019, said leading property consultancy and chartered surveying firm, Cavendish Maxwell.
On the residential sector, Cavendish Maxwell said prices continued to decrease, with villas/townhouses now costing, on average, 6.2% less than a year ago. Apartment prices in Abu Dhabi Investment Zones also declined by 5.8% over the same period. However, many potential buyers continue to wait for the market to soften further in H1 2019.
In 2018, Abu Dhabi’s office sector registered a decline in demand for office take-up and upgrades. This was due to limited business growth and low oil prices. Aside from the oil and gas sector, the majority of demand for acquiring office space in Abu Dhabi was from the general trading, leisure and hospitality sectors.
The retail market witnessed strong demand from the F&B sector, however other sectors fared less well, with retail owners offering rent-free periods, flexible leasing terms and rebates to retain tenants in 2018.
Supply is expected to increase in the medium term with the addition of new regional malls such as Reem Mall and Al Maryah Central Mall, with more than 92,903 sqm Gross Leasable Area expected to reach completion by 2020.
Abu Dhabi’s hospitality sector experienced steady growth in demand throughout 2018. As of November 2018, the total number of guests recorded increased by 4.6% compared to the same period in 2017, from 3.87 million to 4.04 million.
According to official figures, the city’s room inventory has increased by 8.9%, to a total of 29,214 rooms as of November 2018.
All additional units during 2018 were positioned within the luxury and upper-upscale sectors. A total of 282 rooms are expected to be delivered in 2019, with a further 879 rooms in 2020.