The report, released by Asteco stated that real estate professionals and participants have been increasingly vocal in urging the central bank to take up the initiative amid signs of a slowdown in the property market across most asset classes.
John Stevens, managing director of Asteco, stated: “We believe these developments have the potential to absorb some of the pent-up demand from end users and first-time buyers.”The realty sector has welcomed the introduction of new initiatives, such as rent-to-own schemes and crowd funding.
Najeeb, a senior executive of MS International Real Estate stated that the property market needed more stimuli to get out of the slow down, saying: “A string of bold reforms announced by the government over the past few months will certainly invigorate the property market. The long-term residency rules in favour of property investors will help ignite a revival in global investor flow into the UAE real estate market. We hope the scenario will change for the better within a matter of months.”
A recently released Asteco survey stated that the market has seen a substantial delay in project handovers, mainly resulting from delays and overly ambitious handover schedules.
According to it, a sizeable number of units previously forecasted for completion in first half 2018, will only be ready in 2019. Dubai’s new inventory added in third quarter 2018 comprises 3,850 apartments and 570 villas and townhouses, bringing the total for the year to date to just over 12,000 residences, with projections for the final quarter in line with these figures.
The survey also detailed how rental sales and sale prices of commercial and residential properties dipped in the third quarter.
Villa and apartment rental rates dropped by 3% and 2% respectively since the second quarter, “maintaining the downward trajectory” observed over the past quarters. The decline of residential sales prices has been more pronounced at 4%.
Office rental rates also declined 5% in the third quarter following a period of stability due to the new supply and either limited or negative business and employment growth.
In Abu Dhabi, apartment sales prices witnessed a marginal decline of 1% over the third quarter of 2018, mainly due to the limited demand for completed units available within the secondary market – which translated into low transactional volumes.
Apartment rental rates in Abu Dhabi fell by an average of 3%, with the highest drop reported for mid- and lower-end properties, villa rental rates followed a similar trend with a quarterly decrease of 1%.
Meanwhile, the demand for office space remains limited. While the average rental rates softened by 1% over the last three months, some mid- to low-end commercial buildings recorded significant annual declines of up to 10%.
In Al Ain, the overall subdued market activity has resulted in relatively static rental rates in third quarter 2018 across most asset classes, with moderate annual drops of 6% for apartments, and 5% for office and retail rents.
In the Northern Emirates, apartment rental rates reported an average quarterly decline of 4%, with Ras Al Khaimah and Ajman taking the lead with 6%, followed by Sharjah and Fujairah with 3%, while Umm Al Quwain rates softened marginally by 1%.
In Sharjah, office rental rates continued their downward trend with quarterly and annual reductions of 3% and 8% on the back of low demand.
Stevens said rental rates across all asset classes are expected to come under further pressure this year, and this trend is likely to spill over into early-2019. Some property analysts remain optimistic though that the real estate sector would be a fillip following a series of residence visa reforms introduced by the government.