Abu Dhabi Real Estate Prices Keep Falling in Q2

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(ABU DHABI, UAE) - Rents of houses and apartments in Abu Dhabi continued to fall an average of 7 percent for top properties and up to 15 percent for lower quality properties in Q2, according to the latest report by Asteco. The downward trend echoes what happened in Q1 and is likely to continue since many new apartments are coming on the market.

The report says 4,500 new apartments are being delivered currently,  and an additional 8,000 apartments are due for completion by the end of 2010. Until this year, the story in Abu Dhabi was far greater demand than available housing. Asteco Property Management CEO Elaine Jones said, "These changing market dynamics will continue to put downward pressure on rents, particularly older stock, which should be interpreted as a healthy move for an improvement in business."

Most new high-end property will be concentrated on Reem Island and Al Raha Beach, with mid-end supply coming up on Abu Dhabi island, and more affordable lower end stock on the mainland, which includes the first phase of Al Reef Downtown.

Sales prices on average says Asteco says have remained unchanged and demand continues to be entirely focused on those developments close to completion. "Sales activity was relatively flat, but with the first phases of Reem Island and Al Raha Beach completing, we anticipate improved demand from owner-occupiers, " said Paul Maisfield General Manager of Asteco's Abu Dhabi office.

 "There is a gap in the market for good quality, value-for-money villas in master planned communities that are available for sale to expatriates. Most existing compounds suffer from high density levels with limited retail, recreational facilities, and open space," added Maisfield.     

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