UAE real estate recovery likely next year
The tie-up announced in March between two of the country’s biggest real estate companies, Aldar Properties and Emaar Properties, may have buoyed the market in the short-term but a real estate price recovery in the UAE remains a long way off, analysts say.
This partnership perhaps marks the start of a trend towards greater collaboration in the industry, by real estate consultancies as well as developers. Last week, Cluttons’ Middle East operations were acquired by Savills’ UK division, as part of a strategy to increase efficiencies.
Still, despite forecasts at the end of 2017 that the market would bottom out this year, most experts have changed their tune as prices continued to slip in the first quarter of 2018. Recovery is now not expected until 2019, according to several reports published this year.
The industry faced numerous headwinds in 2017, including low oil prices, pressure from budget-conscious residents for affordability and widespread corporate consolidation, which led to shrinking office and housing requirements and forced landlords to lower rents, creating a “tenant’s market”.
In Abu Dhabi, sales prices plunged 7.9 per cent year-on-year in February and 1 per cent month-on-month, while rental prices fell 10 per cent year on year, market analyst Reidin said in its March residential price index. At the top of the market, for example on Saadiyat Island, prices appear to have stabilised to a degree in the first quarter.