Property prices in Abu Dhabi remain stable but only a small number of investors are currently active in the market and many are waiting for completion dates for 2010 before committing, it is claimed.
According to Landmark Advisory, one of the leading real estate consultancy companies in the Middle East, October and November were two of the most active sales months of 2009 for the city with demand focused on close to completion developments such as Marina Square, Al Reef Villas, Sky Tower and Al Bandar.
However, prices have not measurably appreciated and buyers continue to look for distressed sales.
They are looking for completed properties and are waiting for hand over dates to be announced by developers.
‘Despite an increase in sales activity in the third quarter, demand levels since mid November have waned, leading to limited sales volumes in December,’ explained Jesse Downs, Director of Research and Advisory Services, at Landmark Advisory.
The company’s latest sales guide shows that transactional prices remained stable throughout the fourth quarter of 2009 and are not expected to increase until property is handed over in 2010.
‘Prices are only likely to increase for developments that are close to completion during 2010.
As these developments get closer to completion, transaction volumes are expected to increase, which could gradually lead to marginal price increases,’ said Downs.
Asking prices saw a marginal increase of 5 to 6% with the exception of Al Bandar which has seen average asking prices decrease by 9% since September 2009.
‘This indicates that Al Bandar owners are now adjusting their price expectations.
By reducing the price, Al Bandar is likely to start attracting more buyers that were until now focused on less expensive developments,’ explained Downs.
‘Our findings show that while buyers through the third quarter of 2009 were still primarily end-users, this demand segment is now waiting for clear signals of progress within nearly completed developments before engaging in any activity,’ she said.
‘Only a small number of investors are currently active in the market.
The postponement of delivery dates, most notably for Al Bandar and Marina Square may be further restricting demand,’ she concluded.