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Abu Dhabi’s residential capital values slip 13.3% in Q2 - ValuStrat

Abu Dhabi’s residential capital values slip 13.3% in Q2 - ValuStrat
Abu Dhabi’s residential capital values fell 3.3% Q-o-Q in Q2

UAE – Mubasher: Abu Dhabi’s residential capital values fell by 13.3% year-on-year in the second quarter of 2019, according to a report issued by the Dubai-based leading consulting and advisory group ValuStrat.

Quarter-on-quarter, residential capital values in the emirate decreased by 3.3% in Q2-19, the report added.

The weighted average residential value stood at AED 9,795 per square metre, with apartments at AED 10,861 per square metre and villas at AED 7,244 per square metre.

Hydra Village and Al Reef have seen the highest quarterly declines in prices that ranged between 3.7% and 4.3%, ValuStrat said.

Most areas within Abu Dhabi shed an average of 12% in capital values on an annual basis, the report highlighted.

Meanwhile, only two locations were marginally less affected by the downward, including apartments on Saadiyat Island and villas in Mohamed Bin Zayed City with capital values for typical units contracting 10.2% and 6.9%, respectively.

Haider Tuaima, head of Real Estate Research at ValuStrat, said: “Abu Dhabi city is increasingly becoming more affordable, and with the recently announced freehold law, investing in Abu Dhabi real estate has become more attractive. This is at a time when prices and rents can be further negotiated.

“Investors can also expect relatively high yields and tenants have the upper hand to upscale their rental property,” Tuaima added.

The residential rental ValuStrat Price Index (VPI) in Abu Dhabi for Q2-19 fell to 75.5 points by 24.6% since 2016.

Moreover, the Q2-2019 residential rental VPI in the emirate slid 2% quarter-on-quarter and 7.9% year-on-year, the report showed.

It is worth noting that the residential rental VPI is “a 100-index with a base set for Q1 2016 that monitors five apartment and five villa locations within Abu Dhabi’s investment zones and compares similar units within those locations on a quarterly basis.”

The average gross yields of Abu Dhabi stood at 7.5%; with 7.4% for apartments and 6.7% for villas, the report noted.

“The average occupancy rate among a sample of 31,073 residential units stood at 79%,” the report indicated.

In the three-month period ended 31 March 2019, the UAE’s capital had a total stock of 29,400 keys within a mix of 139 different hospitality establishments.

Furthermore, the average occupancy rate within the emirate recorded a solid rate of 81% in Q1-19, while, the average room rate (ARR) and revenue per available room (RevPAR) grew 16% and 16.6% year-on-year, the report highlighted.