Abu Dhabi apartment prices have fallen by as much as 15 per cent since May, according to a report from the property consultancy Landmark Advisory. But the completion of the first properties available to expatriate buyers could help to stabilise the market and may even lead to a rise in selling prices. "It is still a completely off-plan market," said Jesse Downs, the director of research and advisory services at Landmark Advisory, a unit of Landmark Property in Dubai.
"Once product is actually delivered, sale prices for those projects will stabilise and may even improve. During the next year, Abu Dhabi will witness the handover of its first freehold units. This will effectively mark the first time expatriates can purchase completed residential units in the capital." Most transactions in Abu Dhabi were on projects close to completion, according to Landmark. But few transactions were registered at the Sun and Sky Towers on Al Reem Island and Al Bandar at Al Raha Beach - both of which are due for completion in the second and third quarter of next year - due to their higher price.
Property brokers reported that June and July were the busiest months this year in Abu Dhabi and Dubai, where there were signs of prices stabilising. "Listing prices have barely changed, but there are far fewer distressed listings for nearly completed developments," Ms Downs said. Villa prices in the capital are stabilising after declines of up to 45 per cent since the third quarter of last year. Dubai property prices are also stabilising in preferred locations, with most transactions involving one and two-bedroom apartments, according to Landmark Advisory. But a surplus of studios, which were popular buys among speculators in the boom years, are proving harder to sell.
Other brokers have also reported a pick-up in transaction numbers in the summer, as sellers become more realistic about the market. "July was the busiest month recorded so far [this year] in Dubai, because people are accepting the levels of pricing," said Iseeb Rehman, the managing director of Sherwoods. "There is some indication that confidence is coming back. But at the moment things are a little bit erratic. You can go in one area and probably find 10 different price levels, because one seller may be desperate to sell and the other does not really care."
Consolidation among property brokers has also been cited as a possible reason for the summer rise in activity. "Many brokers have closed up and shipped off, leaving the remaining brokers to get down to business," said Marcello Sambartolo, the head of marketing at the propertyfinder.ae property portal. "Another reason could be that it's simpler to go up when coming from a low point. Whatever the motive, there's some action."
But Landmark warned that any weakening in Dubai rents could hit selling prices. "Overall, Dubai sale prices are relatively stable, but if rents keep falling for an extended period, then sale prices could be dragged down as well," Ms Downs said. Apartment rents in Dubai dropped 23 per cent in the second quarter of the year. ngillet@thenational.ae
