Abu Dubai Market Performance
Drivers
- Ongoing stability in oil prices
- Availability of newer, affordable products and the overall softening rental market aiding tenants in housing cost savings
- Diversification measures and government stimulants up-ticking market sentiment
- The pace of sale and rental price decline decelerating. Although a clear turnaround is unlikely, this deceleration is expected to continue in the near term, although subject to controlled supply deliveries
Deterrents
- Most of the absorption is displacement of tenant demand rather than new take-up
- Most buyers are investors instead of end-user occupiers transitioning to home-ownership
- Pool of end-user occupiers not growing at expected levels, particularly at the pace of increasing a vacancy and new supply levels
- New lower priced off-plan stock being absorbed relatively well due to investor expectations of sustained rental demand and higher yields. However, if tenant demand of these projects is insufficient at handover, this supply surge is expected to exert considerable downward pressure on rents, leading to faster yield compression and eventually pulling sales prices down over the mid-term
