Hotel rooms in Abu Dhabi were 50 per cent more expensive in the month of Abu Dhabi's Grand Prix in 2018 than for the rest of the year, a new report shows.
Data from Core Research found average room rates increased to Dh517 in November last year, compared to an average of just over Dh345 for the year. Over a longer three-year period from 2016-18, average room rates were Dh522, which was 43 per cent higher than the average room rate over the same period.
"F1 has been the most prominent social and sporting event in Abu Dhabi and it continues to hold that position," Core's Abu Dhabi market update says, adding that many F1 fans now make an annual trip to an event that brings down the curtain on the sport's season. "Over the last few years, we have seen a consistent spike in tourism metrics in the month of November."
Occupancy rates were also 10 per cent higher in the month of November last year at 82 per cent, but with efforts being made to develop Abu Dhabi's tourism infrastructure year-round, the current spike experienced is expected to soften in future years.
"While the scale of the F1 event continues to expand, the dependency on F1 as a focal event to feed the wider Abu Dhabi tourism ecosystem is expected to recede in the long term as other adjoining destinations and year-round tourism calendar strengthen Abu Dhabi’s global appeal to tourists," the report said.
The emirate's residential market continues to suffer from a softness in demand, however, with average sales prices of apartments and villas witnessing an 8 per cent drop year-on-year in 2019, the report said, but there are signs that price falls are levelling off.
“Abu Dhabi saw sales and rental prices soften for the fourth consecutive year, however, the pace slowed down in 2019. While a recovery is yet to be seen, we are reaching a pricing floor where developers and landlords, particularly those who are leveraged, may not have room to drop prices any further — albeit, translating to a bottoming out of the market,” the report said.
Abu Dhabi rents, Q3 2019
Prices in various communities such as Al Raha Beach, Yas and Saadiyat Island, are relatively resilient demonstrating a lower level of depreciation, the report said.
Almost 3,000 new homes have been brought to market so far this year, and an additional 1,000 are scheduled for handover by the end of 2019.
“Following the Ghadhan 21 initiative in 2018, positive government impetus continued through 2019, mainly with the launch of a freehold law that allows foreigners to own land and property within Abu Dhabi’s investment areas on a freehold basis for the first time,” said Prathyusha Gurrapu, head of research and advisory at Core.
“With a stabilised job market and steady growth in both the oil and non-oil GDP figures, a positive trickle-down effect on the overall economy is expected over the near to midterm,” she said.
The real estate consultancy expects new residential schemes to continue witnessing a steady uptake on the back of attractive price points and payment terms. However, completed homes will remain challenged by newly-delivered and off-plan stock — albeit maintaining sales prices under pressure.
The report stated that in the rental market segment villa districts are showing more resilience than over the last few years. Apartment rents, on the other hand, have witnessed the same level of declines this year as in 2018. Within the same communities, studios and one-bed apartments have typically outperformed larger homes.
The Abu Dhabi office market has also adjusted to the consolidation and redundancies that were witnessed in recent years. Al Maryah Island is outperforming the rest of the office market, with Abu Dhabi Global Market Square witnessing a steady demand from government and private entities, the report said.