Abu Dhabi, UAEMonday 18 November 2019

Where Abu Dhabi property rents have risen and fallen, Q3 2019

Take a look in the slideshow below at how rents have fared in different areas of the city

What was the general market movement in Q3?

While on the most part rents were still declining, as they have done for the past couple of years, there were possibly the first signs of recovery in the capital, with some areas recording rises during the period from July to September.

Chestertons reported a 1 per cent average fall quarter-on-quarter for apartments and no change for villas. JLL also found no change to villa rates and a 2 per cent decline for apartments, while Asteco said the changes were "marginal" and noted that areas which experienced significant decreases in previous quarters had no change.

Although there were disparities between the data provided by the brokers, Chestertons said it witnessed an increase in rents in Mohammed bin Zayed City and Al Raha Beach - 4 per cent for a two-bedroom apartment in the latter.

It also reported a 1 per cent rise in villa rents in Khalifa City, while it said Al Raha Gardens' four and five bedroom villas experienced the biggest declines suggesting "people could be downsizing in this location to save costs".

What else did the property companies have to say?

Despite the slight improvement compared to previous few quarters, the downward pressure is expected to continue as more supply becomes available.

Most villa developments "maintained healthy occupancy rates", according to JLL, but it said the supply situation means "vacancies are expected to increase further".

The biggest rental movements for apartments were on Saadiyat Island where Chestertons said the cost of a one-bedroom apartment dropped from Dh100,000 in Q2 to Dh90,000 in Q3. The Asteco data showed a 3 per cent average fall for apartments in that area during the third quarter.

How does the supply situation look for the rest of the year?

Like in neighbouring emirate Dubai, there is no shortage at the moment. However, the figures for completed units vary.

JLL said approximately 380 residential units were completed, bringing the total residential stock to 260,000 units. Projects included two buildings in the Shams district on Reem Island, and a tower in Khalidiyah.

An additional 5,400 units are scheduled for delivery by year end, mainly within Reem Island, Al Raha Beach and Saadiyat Island.

Asteco put the number of completed units at 1,000, of which 900 were apartments and it expects a total of 4,100 to be finished in the fourth quarter.

Will it be a similar case of supply outstripping demand next year? Chestertons doesn't think so.

"There is not a significant amount of new supply expected to be delivered next year which means there could be a better balance between supply and demand which will ultimately lead to a more stable market in the future," it said.

The Abu Dhabi landlord wants to sell the apartment. Ravindranath K / The National 
Marina Square on Reem Island. Ravindranath K / The National

Anything else of note?

The introduction of toll gates in the capital was meant to come into force on October 15.

However, the Department of Transport announced that the tariffs would begin from January 1, 2020, and so any effect on residents' decision on where to live will unlikely be felt until well into next year.

Meanwhile, there have been further plot sales launched, after successful offerings earlier in the year.

Aldar launched Saadiyat Reserve, a 422,370 square metre community featuring 306 serviced villa plots, with planning approval for 4 to 6 bedroom villas. They were available to all nationalities for between Dh1.6 million and Dh2.5m.

Wahat Yas by Wahat Al Zaweya Real Estate Development also launched. This is located between the Al Bahia area and Al Raha Beach, next to the Yas Island water canal. It comprises villa and building land plots (available to UAE nationals only) that start from about Dh1.1m.

Furthermore, Aldar is offering rent-to-own deals for select homes in its West Yas residential community on Yas Island. Tenants pay Dh220,000 a year for five years which is then converted into equity.

Updated: November 6, 2019 07:14 AM

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