Abu Dhabi’s housing market continued to feel the pressures of weakened demand, sluggish economic growth, and cautious investor sentiment during the third quarter of 2017, according to Chestertons MENA.

The property company’s latest Abu Dhabi Residential Market Q3 2017 report showed that sales prices on average decreased by 3% for apartments during the third quarter. It said prevailing economic factors prompted residents to move to more affordable areas such as Khalifa City, Mohammed Bin Zayed City, and Muroor.

Ivana Gazivoda Vucinic, head of research at Chestertons MENA, said: “In the first half of 2017, we saw a number economic factors place downwards pressure on the Abu Dhabi housing market including low oil prices, increased stock in the secondary market, a rising cost of living and work redundancies.

“In Q3, these factors continued to steer market performance, while the announcement of new, high-end residential projects, raised caution among investors. However, an expected revival in oil prices due to global stock depletion and renewed government activity thanks to VAT receipts has cast a slightly more optimistic outlook for the market.”

The emirate’s rental market demonstrated similar trends, with an overall decline in rental prices of 2% and 1% for apartments and villas respectively, during the third quarter.