While a downward projection in the UAE’s real estate market is unavoidable, the medium and long-term forecast in the sector is positive, according to a new report from the property services company Asteco.
Asteco’s Q4 UAE real estate report revealed a total of 6,600 residential units were delivered in Abu Dhabi, compared to 31,000 in Dubai.
“Similar to 2018, the pace of new project launches eased over 2019 as developers adopted a more cautious approach in response to lower demand and growing supply,” said John Stevens, managing director of Asteco, adding that construction progress and overly ambitious handover programs also contributed to the delay.
The report noted that average apartment rental rates in Abu Dhabi fell by 7 percent over the course of the year, while sales prices fell an average of 8 percent. The decrease for villas was less pronounced, with rental and sales reductions of 4 percent, respectively.
The Dubai sales market, for its part, saw drops of 13 to 15 percent for apartments, villas and offices alike. Office rental rates saw the most significant declines – of 12 percent – followed by apartments with 11 percent and villas at 10 percent.
“In an increasingly competitive market, the importance of professional property management and maintenance services has become increasingly crucial and will help proactive landlords differentiate themselves from the competition,” Stevens added.
Giving his forecast for the 12 months ahead, Stevens said: “The downward trajectory in the real estate market for the short-term is unavoidable due to tepid economic and market conditions and the expected supply glut.”
However, he said that “the outlook for the medium-and-long-term for the UAE is encouraging fueled by a pro-active government response and a clear focus on economic progress and sustainability”.