Capital rental rates are down 25 to 40 per cent in many neighbourhoods, new data shows - with video.
Abu Dhabi rents continue to slide in tenant-led market
Abu Dhabi rents continue to slide, providing opportunities for house-hunters looking for bargains.
The average rental price dropped 9 per cent in the second quarter, which ended last month, from the previous quarter, according to data released yesterday by Asteco, a property management firm.
Rates are down anywhere from 25 to 40 per cent in the past year, depending on the neighbourhood, said Paul Maisfield, the general manager of Asteco's Abu Dhabi office.
"It's a tenant-led market at the moment," Mr Maisfield said. "A lot of supply is coming on line when demand is not there."
Two-bedroom apartments in a high-quality development on the Corniche are now renting for between Dh140,000 (US$38,115) and Dh170,000 a year, the company reported. A year ago a similar Corniche two-bedroom flat rented from Dh210,000 to Dh230,000.
In central Abu Dhabi, rents range between Dh120,000 and Dh140,000 for a two-bedroom apartment, compared with a range of Dh160,000 to Dh180,00,000 last year.
One of the few exceptions to the trend is Al Bandar on Raha Beach, where rents have remained steady, with two-bedroom apartments attracting between Dh140,000 and Dh180,000. Rates for villas in Al Reef increased slightly.
"Villas in compounds are still sought after," said Andrea Menown, the leasing manager for LLJ Property, an estate agency. Apartments with available parking are also in demand, she said. But the agency is also witnessing widespread drops in apartment rates.
"We are starting to see two and three-bedroom apartments in new buildings sit vacant when they are overpriced to begin with," Ms Menown said.
The completion of several new projects, including apartments in Al Zeina in Al Raha and 516 town houses in Al Reef, is likely to continue to drive down rates, Asteco reported.
"We haven't had an influx of new people coming in," Mr Maisfield said. "It's just bad timing for the market."
More than 16,000 residential units are scheduled for completion in the next year, according to Jones Lang LaSalle. Projects on Reem Island, Raha Beach and Etihad Towers will offer new choices for people seeking to rent.
"It will be an interesting six months," Mr Maisfield said. "These developments will set important benchmarks for the market."
Two-bedroom apartments are available for Dh125,000 a year in Sun and Sky towers on Reem Island, which started handing over units earlier this year, he said.
"Everybody else will have to adjust accordingly," Mr Maisfield said.
Most of the activity is coming from people upgrading or moving to new homes, rather than people moving into Abu Dhabi. The number of inquiries to the agency has doubled in recent months, but it's "all driven by people already here".