Property prices have fallen in Abu Dhabi by an average of 15 per cent in recent months, but a lack of finance is stalling the market, according to industry experts.
Prices in the secondary property market have softened after peaking last summer, with big falls occurring at Al Raha Beach and Al Reem Island, according to LLJ Property, a property broker based in the capital.
The prices of apartments at both developments, which reached an average of Dh1,900 per square foot in September, are now worth about Dh1,600.
Still, the prices are higher than they were at this time last year, according to Linda Loughnane, the managing director of LLJ Property.
Apartments at Al Raha Beach and Al Reem Island were then selling for an average of Dh1,200 per sq ft, she said. "The drop is the result of a lack of confidence due to a lack of finance," she said.
Villas at Al Reef - the only affordable development targeting middle incomes in Abu Dhabi, which will be ready for delivery this September - are now selling for about Dh700 per sq ft compared with Dh1,060 at its peak last year.
Rene Mayer, the managing director of Hayatt Real Estate Agency, said that "while there's been a dip in the market", the company was still seeing interest from buyers - but the main issue was accessing finance.
"There are buyers out there and for the first time we're seeing people who are waiting for construction to be completed and who plan to live in the properties," he said.
"They have a good income and want to get good deals because the prices are softening, but they need finance and are now in an unfortunate position because liquidity has dried up."
Mr Mayer said the market needed "banks to return to their old lending mentality".
Sorouh Real Estate says it has taken steps to generate finance solutions for its end-user customers as well as for speculators who can no longer meet payment instalments. The company is working on finance deals with Abu Dhabi Finance and Aseel Bank, the Islamic finance arm of First Gulf Bank.
"We have coupled [the defaults] with financing," said Gurjit Singh, the company's property development officer. "A lot of investors now have mortgages that are allowing them to make the necessary progress in their payment plans." Mr Singh said that part of the company's plan was to "turn speculators into end-users".
"There is a clear tendency for the shorter-term investors to look at longer-term investments. The simple reason for this is that there is yield for rental in Abu Dhabi," he said. "So a very important point of differentiation for a developer now is the conversion rate of speculators into an end-user or a longer-term investor."
An executive at Aldar Properties said finance deals for its customers were "in the pipeline".
Liquidity will also be boosted by the mortgage provider, Abu Dhabi Finance, a joint venture between Mubadala Development, Abu Dhabi Commercial Bank, Aldar Properties, Sorouh Real Estate and the Tourism Development and Investment Company.
Meanwhile, speculators who bought property in Abu Dhabi are seeking financial support from developers to help them continue with their payments.
"We bought stock on Reem Island two years ago, some of which we've paid 40 per cent towards," said one investor who is part of a group of 20 from the UK. "We sold some of it last year and made a good return, but we wanted to keep the rest until completion for rental purposes, especially the commercial property.
"But the problem now is we haven't got the cash to pay for the rest so we need local help. We're speaking to the finance guys to find out what they're coming up with and with the developers about moving forward."
Though property prices in Dubai and Abu Dhabi have been fuelled mainly by speculation, the investor said that some developers were also to blame. "They had buyers but a shortage of stock, so they then bought the property back from us and sold it on for a great profit - this happened in a lot of cases."
agiuffrida@thenational.ae
ngillet@thenational.ae
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Reputation
Taylor Swift
(Big Machine Records)
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Dubai works towards better air quality by 2021
Dubai is on a mission to record good air quality for 90 per cent of the year – up from 86 per cent annually today – by 2021.
The municipality plans to have seven mobile air-monitoring stations by 2020 to capture more accurate data in hourly and daily trends of pollution.
These will be on the Palm Jumeirah, Al Qusais, Muhaisnah, Rashidiyah, Al Wasl, Al Quoz and Dubai Investment Park.
“It will allow real-time responding for emergency cases,” said Khaldoon Al Daraji, first environment safety officer at the municipality.
“We’re in a good position except for the cases that are out of our hands, such as sandstorms.
“Sandstorms are our main concern because the UAE is just a receiver.
“The hotspots are Iran, Saudi Arabia and southern Iraq, but we’re working hard with the region to reduce the cycle of sandstorm generation.”
Mr Al Daraji said monitoring as it stood covered 47 per cent of Dubai.
There are 12 fixed stations in the emirate, but Dubai also receives information from monitors belonging to other entities.
“There are 25 stations in total,” Mr Al Daraji said.
“We added new technology and equipment used for the first time for the detection of heavy metals.
“A hundred parameters can be detected but we want to expand it to make sure that the data captured can allow a baseline study in some areas to ensure they are well positioned.”
Globalization and its Discontents Revisited
Joseph E. Stiglitz
W. W. Norton & Company
Blackpink World Tour [Born Pink] In Cinemas
Starring: Rose, Jisoo, Jennie, Lisa
Directors: Min Geun, Oh Yoon-Dong
Rating: 3/5
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UAE currency: the story behind the money in your pockets
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Profile of Hala Insurance
Date Started: September 2018
Founders: Walid and Karim Dib
Based: Abu Dhabi
Employees: Nine
Amount raised: $1.2 million
Funders: Oman Technology Fund, AB Accelerator, 500 Startups, private backers
Porsche Taycan Turbo specs
Engine: Two permanent-magnet synchronous AC motors
Transmission: two-speed
Power: 671hp
Torque: 1050Nm
Range: 450km
Price: Dh601,800
On sale: now
The%20Super%20Mario%20Bros%20Movie
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How Voiss turns words to speech
The device has a screen reader or software that monitors what happens on the screen
The screen reader sends the text to the speech synthesiser
This converts to audio whatever it receives from screen reader, so the person can hear what is happening on the screen
A VOISS computer costs between $200 and $250 depending on memory card capacity that ranges from 32GB to 128GB
The speech synthesisers VOISS develops are free
Subsequent computer versions will include improvements such as wireless keyboards
Arabic voice in affordable talking computer to be added next year to English, Portuguese, and Spanish synthesiser
Partnerships planned during Expo 2020 Dubai to add more languages
At least 2.2 billion people globally have a vision impairment or blindness
More than 90 per cent live in developing countries
The Long-term aim of VOISS to reach the technology to people in poor countries with workshops that teach them to build their own device
Company%20Profile
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The specs
The specs: 2019 Audi Q8
Price, base: Dh315,000
Engine: 3.0-litre turbocharged V6
Gearbox: Eight-speed automatic
Power: 340hp @ 3,500rpm
Torque: 500Nm @ 2,250rpm
Fuel economy, combined: 6.7L / 100km
Name: Brendalle Belaza
From: Crossing Rubber, Philippines
Arrived in the UAE: 2007
Favourite place in Abu Dhabi: NYUAD campus
Favourite photography style: Street photography
Favourite book: Harry Potter
The specs
Engine: 3.5-litre V6
Power: 272hp at 6,400rpm
Torque: 331Nm from 5,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.7L/100km
On sale: now
Price: Dh149,000