MEAM UAE Business Awards 2018

6 MEA MARKETS / 2018 UAE Business Awards , Abu Dhabi’s Real Estate Market Nearing Bottom As Economy Prepares For Stronger Growth In 2018 While the first quarter of 2018 has recorded a slowing rate of capital value declines across theUAE, developers of high end homes inAbuDhabi appear to be sensing a bottoming of themarket and are pressing aheadwith new schemes, according to international real estate consultancy, Cluttons. The Cluttons Abu Dhabi Property Market Outlook report for Spring 2018 indicates that the very top of Abu Dhabi’s sales market has been relatively positive, and is showing signs of stabilising. Sea facing villas on Saadiyat Island for instance, which remain the most expensive residential property type in the capital at AED 1,700 psf, have seen no movement in prices for two consecutive quarters. “This trend is likely to help tempt buyers back into the market especially as we feel the stability is likely to persist,” says Edward Carnegy, Head of Cluttons Abu Dhabi. “In fact, we have noted a marginal uptick in demand from Emirati buyers predominantly, looking for second homes, or expanding their buy- to-let investment portfolios on Saadiyat Island. Interestingly, of the 13 submarkets we monitor in Abu Dhabi, sea view villas on Saadiyat Island have experienced the biggest price correction since 2015, with prices dropping by an average of 26.1%,” he added. Rents across Abu Dhabi’s 1 residential investment areas decreased by 2.3% during Q1 2018, following the 4.3% drop during the final quarter of 2017. The latest change leaves rents 11.5% lower than this time last year. The falling rents, according to Cluttons, are reflective of the lingering weakness in overall requirement levels. Tenants are wary of the threat of job losses and the rising cost of living, associated with the introduction of VAT and a general upward creep in inflation, which has left many household budgets under tremendous pressure. “As a result, tenants are negotiating reductions at renewal, while landlords are increasingly receptive to meeting the expectations of tenants by agreeing to close deals below headline asking rates, and they are offering flexible rental payments in multiple cheques to attract tenants as well as other incentives such as zero commission payable and rent free,” added Carnegy. Faisal Durrani, Head of Research at Cluttons said: “2018 looks set to be a better year for the UAE