Increased job cuts in both the private and public sector have taken on a toll on Abu Dhabi’s property market, which continued to face downward pressure in both rents and sales prices in the third quarter of this year, Gulf News has reported.
- According to the latest report by JLL, a property consultancy, average prime rents for two-bedroom apartments fell six per cent in third quarter compared to the same quarter in 2015 to reach around Dh157,000 per annum.
- Average sales prices in prime locations also fell 11 per cent year-on-year to reach nearly Dh14,750 per square metre, with lower transaction volumes.
JLL said the decline came on the back of lower demand due to fewer employees, with a wave of job cuts within government, oil and gas, and financial services sectors.
In Dubai, lower spending and weaker demand have meant much sharper declines in rental rates, but that’s not the case in Abu Dhabi where developers have scaled back their supply in order to match demand.
“While supply remains under control, increasing vacancy rates are placing downward pressure on residential rents and sales prices. Residents in Abu Dhabi are increasingly looking for cheaper and smaller options owing to further job cuts and reduction in employment allowance and benefits,” said David Dudley, international director and head of Abu Dhabi office at JLL.
In the office market, demand was also weaker as many government entities are going through a period of restructuring in response to tougher economic conditions.