ABU DHABI // Apartment rents in the capital fell by an average of 14 per cent last year, and harder-to-let homes dropped by as much as 35 per cent.
At the same time, rents for Grade A office space – the highest quality available – dropped by an average of 28 per cent, according to a new report from the property consultancy Jones Lang Lasalle.
The falls are the clearest sign yet of an oversupply of homes and offices as the economy struggles to produce enough jobs to keep up with new buildings being completed.
They are good news for businesses planning to move to new offices, and residents negotiating new leases or thinking of moving home.
“While developers have scaled back many projects since the market correction at the end of 2008, the additional supply entering the market is generating an oversupply situation for most asset prices,” the report says.
“Consequently, average rentals and sale prices continued to decline in most sectors.”
Rents could fall further in 2011 with tens of thousands of new homes and offices planned for delivery.
Total office supply should rise by 25 per cent this year, bringing the total space available to roughly 2.75 million square metres, according to Jones Lang Lasalle.
Industry Insights - Drought risk to China wheat crop