Text size:

  • Small
  • Normal
  • Large
Rents in Abu Dhabi fell by 6 per cent over the last three months and price drops are forecast to continue. (Silvia Razgova / The National)
Rents in Abu Dhabi fell by 6 per cent over the last three months and price drops are forecast to continue. (Silvia Razgova / The National)

Abu Dhabi rents down by 6 per cent as new homes arrive

Renting a home in Abu Dhabi is set to become more affordable, with price declines over the last three months forecast to continue.

ABU DHABI // Abu Dhabi rents are likely to fall further in the coming months as another wave of new housing comes on to the market.

Average rents in the capital fell by 6 per cent in the three months to September and by 16 per cent compared with the same period a year ago, the estate agency CBRE says.

CBRE estimates rents are 63 per cent down on the market peak three years ago. And it predicts they will fall even further over the coming months as new projects, such as World Trade Centre Residences at Central Market, are completed.

The market is becoming increasingly fragmented, says CBRE, with some tenants negotiating rents down by between 3 and 9 per cent in the third quarter, while other rents have been static.

“At this point in the development cycle we see no immediate end to this trend with better quality inventory entering the market, adding pressure to ageing and/or inferior units,” said Matthew Green, the head of research and consultancy for CBRE in the Middle East.

“As the market awaits further delivery of high-end offers we may expect some gradual softening of rents as competition increases. This will provide a good indication of the sustainability of the luxury market, which has historically been an undersupplied segment of the housing inventory in Abu Dhabi.”

But the capital is still more expensive than Dubai, said CBRE.

It found the average annual rent for a studio in Dubai stood at slightly less than Dh40,000 (US$10,889), compared with Dh45,000 for a similar property on Abu Dhabi island.

Villas were slightly less affected by the drop in rents, with quarterly declines typically ranging from 2 to 5 per cent. The agent expects villa rents to continue to slide over the coming year as new projects such as Emirati Housing Community developments at Watani, Al Falah and Yas Island come to market.
Housing supply for poorly paid employees remained “limited”.

The requirement for government employees to live in the emirate is likely to lift demand for cheaper developments in Abu Dhabi, said CBRE.

Average offices rents in the emirate fell by 2 per cent compared with the previous quarter and are predicted to fall further in the next six months as more stock comes on stream.

But CBRE added things were looking up for the sector with the rate of rental decline slowing in the third quarter to its lowest level since the start of the property slump.

It reported more inquiries and a rise in activity during the quarter.
Prime office rents in Abu Dhabi were flat at Dh1,600 to Dh1,900 a square metre a year.

“Although the worst effects of the downturn appear to be over, there is still obvious pressures on landlords to maintain competitiveness,” said Mr Green.

lbarnard@thenational.ae

Back to the top

More articles


Editor's Picks

 The Greens, villas: Q1 no change. 3BR - Dh210-250,000. 4BR - Dh210-260,000. 5BR - Dh220-300,000. Q1 2013-Q1 2014 5% rise. Pawan Singh / The National

In pictures: Where Dubai rents have risen and fallen, Q1 2014

Find out how rental prices in the prime locations in Dubai have altered during the first three months of the year and the current rates you will pay according to data provided by Asteco.

 Above, the private pool of Ocean Heights' five-bedroom penthouse flat. Courtesy Christie’s International Real Estate

In pictures: Penthouse flat is height of Dubai luxury living

A five-bedroom penthouse in Ocean Heights in Dubai Marina is on sale for Dh25 million and comes with a private pool and an unparalleled view of Dubai.

 The cooling towers of the Temelin nuclear power plant near the Tyn nad Vltavou in Czech Republic. The country wants to continue expanding nuclear energy capacity despite cancelling a tender to build two new units. David W Cerny / Reuters

In pictures: Best business images for the week to April 17, 2014

Here are some of the best business images for the week to April 17, 2014.

 Three generations of the Hakimi family tend to their stall Crawford Market in Mumbai. Subhash Sharma for The National

In pictures: Shopper’s delight at Crawford Market in Mumbai

Crawford Market is an old British-style covered market dealing in just about every kind of fresh food and domestic animal imaginable. Later on renamed Mahatma Jotirao Phule, the market remains popular among locals and visitors by its old name, taken from Arthur Crawford who was the first municipal commissioner of the city.

 The Wind, Energy, Technology and Environment Exhibition takes place from April 14 to April 16. Above, the Dewa showroom during last year’s Wetex. Jaime Puebla / The National

April corporate and economic calendar for the UAE and overseas

From Cityscape to Wetex to stock-market holidays to nations reporting first-quarter GDP figures, here is our helpful calendar of April's business events in the UAE and internationally.

 Get the latest information on credit cards, bank accounts and loan products in the UAE. Mark Lennihan / AP Photo

Rates report: Latest on UAE loans, accounts and credit cards

Souqamal.com brings you the latest interest rates on banking products in the UAE.

Events

To add your event to The National listings, click here

Get the most from The National