Supply of new residential property units in Abu Dhabi is awaited to see a big rise in Abu Dhabi the same year, providing costs and rentals are also under tension through a few accepted residential districts observing green signals of recovery in the last quarter of 2020 provided by analysts.
Same as Dubai, tenants in Abu Dhabi are also seeking to get away from apartment living as they are uncertain to share common areas with other residents.
“With many occupiers continuing with hybrid workplace strategies, requirements for larger, more open residential space may continue over the first half of 2021,” said Prathyusha Gurrapu Head of Research and Advisory at Core.
Over 4,500 units were provided in Abu Dhabi over 2020 with most construction situated in Al Raha Beach, Al Reem Island, and Yas Island, the housing property consultancy provided.
“The Abu Dhabi market historically has had relatively lower levels of supply handovers each year, however, 2021 is expected to witness a spike with over 7,000 units slated to be handed over. A significant portion of the new supply projected for 2021 is expected in Al Reem Island and Al Raha Beach which are witnessing substantial development activity followed by Yas Island,” said Gurrapu.
While the figure of actual delivery may be slightly less, Core expects existing and future inventory to face further absorption challenges providing the current economic climate of gloomy demand.
Property consultancy Cavendish Maxwell anticipated 5,200 apartments and over 900 villas/townhouses will strike the market in the UAE capital in the first quarter of 2021. Nevertheless, actual materialization could be less due to project delays.
To tackle continuous extension and development in the housing market sector and ensure completion of projects, Abu Dhabi based valuables company ADQ and Aldar Properties have entered into an agreement under which Aldar will take over the management of government capital projects costing Dh30 billion. Projects contain the developments of Riyadh City and Baniyas North along with other projects in Al Ain and Al Dhafra.
Rentals
While average apartment rentals showed a split percent year-on-year lower, the older stock has seen further lower as tenants relocated to superior buildings at similar or lower rentals, provided Gurrapu.
Later, many of the better constructed and active apartment complexes have seen persuasive softening over the last previous years and now have limited room for further depletion.
“Therefore, it is important to note that while rental reductions may show lower year-on-year changes, various landlord incentives such as rent-free periods, a higher number of cheques and other forms of flexibility are supporting headline rentals,” she added.