Real estate in Abu Dhabi continues to feel downward pressure across most sectors due to the lingering impact of job losses and consolidation activity witnessed during 2016/2017. With VAT being introduced across the UAE, a marginal negative impact has been felt in Abu Dhabi’s retail sector, whereas other asset classes are yet to register a shift in dynamics. Prices and rents are softening across the board, however, the pace is starting to decelerate. With oil prices witnessing sustained upward momentum and government spending on the rise, these positive forces are driving up the overall economic sentiment. Although a clear turnaround is distant, we expect this deceleration to continue in the mid-term followed by a very gradual growth in prices and rents. Nevertheless, other factors such as a steady increase in supply over the 12-24 months is expected to impact recovery, although the range of products now on offer is targeting the mid-market segment, thus marginally enabling absorption.
Source : Core Savills