Abu Dhabi Residential Report, Q3 2020

AGENCY ACTIVITY INCREASED OVER Q3, WITH SALES PRICES SEEING GREATER STABILITY

Abu Dhabi’s residential sector saw a rise in market activity over Q3, with transactions continuing to gain pace since social distancing measured eased in May.

Although both apartment and villa prices fell on average, the rate of decline tapered compared to the previous two quarters, with several areas seeing minor uplifts in prices.

Average apartment prices fell by 0.6% quarter-onquarter (q-o-q) and 4.8% year-on-year (y-o-y), with villa prices declining by 0.2% q-o-q and 4.7% y-o-y. This compares to falls of 1.4% and 1.3% for apartments and villas, respectively, over Q2 2020.

Rents also saw a reduced rate of decline over Q3, with average rents falling by 1% for apartments and 0.5% for villas, q-o-q. This compares to quarterly declines of 2.2% for apartments and 2% for villas over Q2 2020. Agents reported a clear rise in demand for villas over Q3, partly accounting for their relatively strong performance.

Residential sales were buoyed by ongoing developer incentives and promotions, including extended posthandover payment plans and fee waivers. This, in conjunction with partnerships with banks to provide customers access to preferential mortgage rates, served to support transaction volumes.

Covid-19’s economic impact will undoubtedly weigh on market performance short-term and, although we expect sales activity to remain steady over Q4, pressure on household incomes will likely challenge rents.

While the longer-term outlook is less clear, assuming a broad economic recovery over 2021, we expect to see greater stability across Abu Dhabi’s residential sector next year.