Job concerns and fall in oil prices impacting property markets in Dubai

The Abu Dhabi residential real estate market saw a slight slowdown in the first half of 2016, mainly due to the decrease in oil prices since the beginning of 2015, according to the latest analysis report. Overall, residential rental rates decreased by 3% on average with high end property rents down by 4% while there was a slight decrease in prices with job security concerns subduing the markets. There is a limited supply of villas and apartments with less than 1,000 units handed over in the first half of 2016 and this has constrained any major reduction in rental rates, according to the midyear review from real estate firm Asteco. Concerns about job losses and reductions in housing allowances are set to keep the rental market subdued in the rest of the year, the report says. It also says that projected residential supply for the second half of 2016 is limited and predominantly concentrated at the high end owner-occupied market in locations such as Hidd Al Saadyat and Saraya on the Corniche. However, despite the sluggish sales market in the first half of the year there is still a perceived lack of good quality mid-market properties and any launches targeting this segment should be well received, the report adds. It also points out that overall rates in Abu Dhabi remained higher, on average, than in any other emirate in the UAE. In the apartment sector there was a slight increase in supply in areas such as Al Raha Beach and Reem Island as some owners put their units back on to the market but the report suggests that asking rates are still relatively high, with only a 2% average decline noted throughout the market. Overall, sales prices in Abu Dhabi are still considered high compared with the rest of the country, with even the more affordable options being out of reach to a large majority of residents.