Research from international real estate services firm, Chestertons, has revealed that while Abu Dhabi real estate sales prices and rental rates continued to undergo downward adjustments throughout 2018, it was at a slower rate toward the end of the year.

Released on Wendesday, the Abu Dhabi Market Report Q4 2018 indicated average apartment sales and villa prices fell by 2 per cent in Q4 compared to the previous quarter.

The year-on-year performance showed that apartment prices declined, overall, by 9 per cent and villas by 11 per cent.

In the rental market, rates continued to soften as apartments saw a further 4 per cent decrease, with a 2 per cent drop for villas from the previous quarter, while annually, apartment rental rates declined by 12 per cent and 9 per cent for villas.

Chestertons MENA Head of Consulting Ivana Gazivoda Vucinic said it was a sign of what was to come.

"Prices are expected to continue to soften in 2019 as 11,000 units are estimated to be delivered, ensuring Abu Dhabi remains an even greater buyer-friendly market over the next 12 months," she said.

Chestertons MENA Head of Consulting Ivana Gazivoda Vucinic. Source: Chestertons

"The rate of adjustment we’re now seeing is slower than previously experienced, which we believe is an indication that prices have reached more realistic levels in several areas of the capital."

For the second quarter in a row, apartment sales prices in Al Ghadeer experienced one of the biggest price adjustments, declining 5 per cent  Q-o-Q to AED822 per square foot, a 16 per cent decline when compared to 2017.

In Al Reef, prices fell by 2 per cent Q-o-Q to AED880 per sqft,  while in Al Raha Beach, apartments remained the most resilient, dropping by just 1 per cent from the previous quarter to AED1,450 per sqft.

Ms Vucinic said oversupply continued to hamper sales.

"We’re seeing developers in the capital, particularly in the off-plan market, offering a range of attractive incentives to investors and end-users in a bid to bolster the market," she said.

"Service charges being waived, reduced municipality fees and favourable payment plans are all now part of the standard sales package."

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