Abu Dhabi’s residential capital values for the third quarter fell 12.6 percent during the last year and 2.4 percent over previous quarter as the residential rental values declined at a slower rate of 9.2 percent annually, said a report by ValuStrat, a leading consulting firm based in Dubai.
This was around 29.1 percent lower than Q1 2016, the base of the VPI (ValuStrat Price Index).
The weighted average residential value this quarter was Dh9,505 per sq m (Dh883 per sq ft), apartments stood at Dh10,044 per square metres (Dh977 per sq ft), and villas at Dh7,083 per square metres (Dh658 per sq ft), it stated.
All ten locations monitored by the VPI witnessed single-digit quarterly declines in capital values of less than 4 percent. Apartments in Al Bandar saw marginal quarterly dips of less than 1 percent, while villas in Mohamed Bin Zayed City saw no change since Q2, according to the report.
On an annual basis, typical apartment units located in Al Reem Island and Al Reef saw 15.4 percent declines, as well as villas in Hydra Village with 16.2 percent annual drop, it stated.
The third quarter VPI – Residential Rental Values declined 2.4 percent quarterly and 9.2 percent annually to 73.8 points. Abu Dhabi’s gross yields averaged 7.4 percent, for apartments at 7.7 percent and villas with 6.6 percent.
“Abu Dhabi is enjoying relatively high residential yields across the board, this is due to the fact that rental value falls are slower than capital value declines,” remarked Declan King, Managing Director & Group Head of Real Estate at ValuStrat.
“As far as residential supply was concerned, Abu Dhabi City began with an estimated 233,986 residential homes by end of 2018. So far this year, an estimated total of 1,000 villas and 733 apartments were completed, which is 31 percent of the projected 5,590 units for 2019,” he added.