Housing rents in Abu Dhabi look set to continue plunging for the first half of 2017 amid continuing economic uncertainty, job losses and cost-cutting measures, property brokers forecast.
Chestertons Mena says villa rents in Abu Dhabi fell by 10 per cent during 2016 while apartment rents fell by an average of 7 per cent.
During the final three months of 2016, the broker said that apartment rents fell 1 per cent compared with the previous quarter while villa rents were down by an average of 2 per cent.
According to Chestertons, rents fell in all of the freehold areas in Abu Dhabi during the final three months of 2016 apart from Aldar’s low-cost Al Ghadeer development on the border with Dubai.
Apartment rents in Al Reef Downtown were subject to the biggest falls, slipping by an average of 3 per cent between the end of September and December 2016 and by 11 per cent during the year. Apartment rents in Al Raha Beach and Reem Island fell by an average of 8 per cent during the year.
Villa rents in Al Reef, Al Raha Gardens and Saadiyat Island all fell significantly during 2016, dipping by between 10 per cent and 12 per cent on average.
Sales prices were also hit by the oil price downturn and job losses across the city.
According to Chestertons, prices for villas in the capital dropped by an average of 6 per cent during 2016 while apartment prices fell by 3 per cent.
During the final three months of 2016, Chestertons calculated that apartment prices fell by 1 per cent and villa prices were down 2 per cent.
“We expect the pressure on rents to remain throughout the first quarter of 2017 with the continuous cost-cutting measures and job instability in the current market,” said Robin Teh, Chestertons’ country manager.
“Redundancies and the shrinkage of the oil and gas sector continue to place pressure on the demand in the market. Tenants are seeking lower rental rates as housing allowances have been reduced.”
Last month, rival broker Core Savills predicted that house prices and rents would continue to decline at similar levels to last year.
It calculated that values for prime and mid-prime villas fell by 15 per cent during 2016, while apartment values were down 7 per cent.
Core Savills said that price and rent falls would be particularly marked on Reem Island, where another 2,400 homes are expected to come to the market this year as towers including Marina 1&2, Sigma 1&2, Al Shams Tower and M Tower are all due to be delivered this year.
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[ Rents ]
Lee Hoagland / The National
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lbarnard@thenational.ae
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