Average monthly rents in Abu Dhabi are the second most expensive in the world, exceeded only by those in London, a new report has shown.
According to CBRE’s Global Living Report, average monthly rents in Abu Dhabi now stand at US$2,649, while in Dubai which came sixth on a global poll, they reached $2,317.
London was revealed as the most expensive city in which to lease a home with monthly rents of $3,245 while Singapore, Los Angeles and New York claimed third, fourth and fifth spots respectively.
Tenants in Abu Dhabi also saw the second highest rent rises in the world over the past year, with increases across the board of 12 per cent, the report said.
Edinburgh was the only world city to see higher rent rises last year with increases of 19 per cent, while despite a property market slowdown in Dubai, the city still saw the seventh highest rent increases in the world last year with average rises of 7 per cent.
However, when looking at house prices rather than rents neither Abu Dhabi nor Dubai featured in the top 10, the report said where Hong Kong, London and New York were the leaders.
Dubai emerged as the 11th most expensive residential location in the world, according to the report with house prices per square foot standing at $452, while Abu Dhabi came in 14th spot with prices per sq ft of $379.
By contrast house prices in Hong Kong stood at $1,416 per sq ft and in London they were $1,025.
The combination of high rents and relatively low house prices combined to give Abu Dhabi investors the fifth highest residential property yields in the world the report said with annual returns of about 7 per cent. Dubai residential yields came out seventh highest in the world last year at about 6.5 per cent.
The report was published on the first day of the Cityscape property exhibition in Dubai amid news that prime house prices in the city are continuing to fall amid a market slowdown.
“We conducted this research because wherever we went in the world clients wanted to know how residential investments compared with each other,” said Jennet Siebrits, head of residential research at CBRE.
“What we discovered was that the Dubai and Abu Dhabi residential markets are considered ‘affordable’ when compared with London, New York or Hong Kong,” she added. “Both Abu Dhabi and Dubai have very high yields and aren’t subject to tax which is very attractive to international investors.
lbarnard@thenational.ae
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