Abu Dhabi, UAEThursday 14 November 2019

Where Abu Dhabi rents have risen and fallen, Q2 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 Q2?

The first quarter showed a continuation of the trend of last year with rents falling across the board - and it was much the same in the second quarter.

Property services company Asteco said apartment and villa rental rates fell 1 per cent and 2 per cent respectively during the quarter, while Chestertons reported a more pronounced decrease of 6 per cent for apartments and 3 per cent for villas.

On an annual basis, Asteco said the drop was 13 per cent for apartments and 5 per cent for villas.

What else did the property companies have to say?

Mainly that tenants are seeking more affordable options, in some cases by downsizing, in order to reduce their living costs.

Chestertons said incentives, such as multiple cheque payments or no commission, were still prominent in mid-market locations making them more attractive, while the incentives in the high end areas were "insufficient to ensure tenant retention" amid lower company housing allowances.

Demand for affordable locations close to the major routes and offer community facilities remained consistent.

Projects at Al Raha Beach and on Al Reem Island in particular felt a rise in occupancy due to competitive rates being offered, but this had a knock on effect on the lower end properties in the city which recorded the larger reductions in rares, according to Asteco.

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

After 3,600 units were completed in the first quarter, Asteco said only 500 were completed in the second quarter, though another 4,950 are predicted to be finished in the second half of the year - the vast majority of which will be apartments.

Most of the new units will be in Al Raha Beach, Al Reem Island, Saadiyat Island and Yas Island.

Anything else of note?

While there was no immediate impact on the rental market, the second quarter did see the Abu Dhabi Government make changes to the property laws so that foreigners can own freehold property in 15 investment zones such as Saadiyat Island, Al Reem Island and Al Raha Beach.

Previously, ownership was restricted to UAE and GCC nationals with foreigners only allowed to own real estate on a 99-year leasehold basis.

The move is expected to stimulate fresh demand and attract more foreign investment to help boost the economy.

Meanwhile, it will be interesting to see if the forthcoming introduction of toll gates in the capital has any effect on where residents choose to live.

The Department of Transport announced plans to introduce charges on October 15, with the four toll gates to be placed at Al Maqta, Mussaffah, Sheikh Zayed and Sheikh Khalifa bridges.

Updated: September 9, 2019 07:24 AM

SHARE

SHARE