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Abu Dhabi real estate market stagnant in Q3

2014-10-23 08:24 Xinhua Web Editor: Qin Dexing

Emirati real estate service provider Asteco said on Wednesday that the average apartment and villa prices in the third quarter this year changed little quarter- on-quarter, as buying preferences shift to prime property within the Emirati capital.

Asteco said while the period from July to September was stagnant in relation to property prices despite the limited availability of stock, apartment and villa prices witnessed a 28 percent increase and 14 percent increase, respectively.

Meanwhile, the shift to prime property continues in the UAE capital. Jerry Oates, the general manager at Asteco Abu Dhabi, said the popularity of developments within investment areas is a trend that continues to be simulated quarter on quarter as sales prices firm up.

"The sales volumes achieved by Abu Dhabi's biggest developer Aldar Properties on the Ansam and Al-Hadeel projects at Al-Raha Beach and Yas Island have highlighted the robust demand for the right type of product within investment zones," the company said.

The market also received a considerable vote of confidence with the launch of the Mamsha Al Saadiyat on Saadiyat Island, Asteco reported.

However, at the Abu Dhabi exchange ADX the shares of Aldar Properties lost 21 percent in the last four weeks, signaling the market expects further cooling of property prices in Abu Dhabi.

Asteco said a three-bedroom home in Hydra Village remained at 1.3 million Dirham (354 million U.S. dollars) recording year-on- year growth of 21 percent while standard Saadiyat Beach Villas topped out at 5.5 million Dirham (1.5 million dollars) for three bedrooms, highlighting an 11 percent increase annually.

Earlier last year, the Abu Dhabi government ended a rental cap for the emirate and let home owners and landlords decide freely which rental prices they want to demand from the tenants on the lease.

However, analysts expect Abu Dhabi to develop a rental index, similar to the Dubai property index by the real estate industry and regulatory authority by 2015 to limit rental increases.

Oates said market sustainability will be enhanced further by a range of new to market developments in 2015. " This combined with a more transparent market for UAE national investors through Abu Dhabi's rental index, which benchmarks and regulates maximum rental increases, will encourage future growth in the UAE capital, " he said.

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