ABU DHABI, April 12 Low oil prices and a
sluggish economy hit Abu Dhabi's property market in the first
quarter of 2017, property specialists Chestertons said on
Its property market has been under pressure for more than a
year after oil-rich Abu Dhabi had to cut government spending and
lay off thousands of workers at state-linked companies partly
because of lower oil revenues.
"Sales prices are expected to further decline due to
redundancies attributed to the shrinkage of the oil and gas
sector," Robin Teh, UAE Country Manager at Chestertons, said in
"We believe the trend of downsizing or moving to more
affordable areas will continue until 2018, when an expected
increase in government spending could improve market sentiment."
Average sales prices of apartments fell one percent and
villa prices dropped 9 percent in the three months ending March
31 compared to the last quarter of 2016, Chestertons' quarterly
The rental market was also depressed with rents for
apartments and villas falling by 3 percent in the first quarter
versus the previous quarter, it said.
In neighbouring Dubai, the Gulf's main financial centre
which is not directly affected by the oil market, rents and
prices were stable for apartments or villas in the first
quarter, real estate firm JLL said in a report this week.
"This suggests that the residential sector is currently
poised close to the bottom of its cycle," JLL said.
The Dubai real estate market has softened since late
But the JLL report said any recovery in residential prices
in Dubai was unlikely before late 2017 at the earliest given a
continued slowdown in the Dubai economy, and its dependence upon
the global economy.
(Reporting By Stanley Carvalho; additional reporting by Alex
Cornwell. Editing by Jane Merriman)