For many residents, the decrease in rent is still not enough to offset the poor quality of much of the accommodation.
Capital rents fall - but not far enough
Abu Dhabi // Tenants dismayed by the cost of accommodation in the capital have welcomed the sharp drop in rents over the past year - but many say they are still not getting good value for their money. For many residents, the decrease - as much as a quarter depending on the size of a property and its location - is still not enough to offset the poor quality of much of the accommodation.
Samir Mahmood, a Pakistani expatriate who works in sales, decided to remain in the one-bedroom apartment he has lived in since February last year, when he paid Dh100,000 (US$27,000) for the annual contract. After negotiating with his agent, he was able to reduce his rent by 25 per cent. But he is still unhappy. "The quality of my place is still not worth even this much," he said. "It is not that nice, especially compared to what my salary could get me in Dubai. It's in a split villa in Mushrif and my kitchen is like a cupboard. In Dubai, I could live by the beach for the same price.
"I am concerned that, later this year, rents will drop more and I will regret having signed up to another year with these people." An exodus to Dubai - driven by lower rents - as well as redundancies and an increased supply of housing in Abu Dhabi over the past year have eased rental prices. However, both families and single people are still struggling to find suitable accommodation. "Most of the places I have seen are not fit for human beings," said Nadine Oghly, a Syrian administrator who is still searching after two months for a studio or a one-bedroom apartment.
"In most of these villas, there is no privacy at all. So far, for the one-bedroom apartments it has been about Dh110,000. "In the villas, agents just divide one room into two with a wooden partition and tell you it is a one-bedroom flat." Cindy Thomas, a 42-year-old mother from India, is struggling to find a place big enough for her family of three. "I have been looking for the past two months," she said. "I can't find anything suitable in the range of Dh60,000.
"We live in a room downtown for Dh24,000 a year. You can find cheaper accommodation outside the city, but when you go to the outskirts there are no groceries, hospitals and practical things. "There are some studios for Dh50,000 available here, but then you are looking at living in a basement with no windows." Although many expatriates have moved to Dubai, for others the commute is too much. Jasmina Music, who works in the property sector, decided when she arrived in Abu Dhabi eight months ago that sharing was the only solution.
"You can get a very good price for a room but nothing else," she said. "At the moment, I can't afford to live on my own." Matthew Turner, an agent with Link Up, a brokerage in Dubai, said the number of house-hunters from Abu Dhabi had slowed down since prices fell. "I haven't seen anybody from Abu Dhabi since last year," he said. "That has slowed down since last November. "This time last year there were more people moving to Dubai, especially to Discovery Gardens. Property there is even cheaper now. Last year, it would have been Dh70,000 for a one-bedroom, now it's Dh50,000."
But for Caiyad Phadad, the head of a TV company, rents have not fallen far enough in Abu Dhabi, and the housing that is available is not up to standard. "I moved in May for a job promotion," he said. "The rent is way too high and the standards are not as good as Dubai." Ammar Mohamad Saeed, an agent with Gravity Properties, said even though rents were lower across most of the capital, tenants were even more mindful of the financial downturn and were looking to save money.
"Prices were much higher last year. After the financial downturn, more people are looking for apartments outside Abu Dhabi, like Shahama and Khalifa City," he said. In such areas, prices are considerably lower than inside the city. The quality of housing in these developments is usually better, with new villas. Rents are expected to drop further this year, in part because some Reem Island apartments, a Dh100 billion project, will be ready for people to occupy in June.
"With a number of assets on Reem Island, Abu Dhabi Island and Abu Dhabi mainland completing in the coming six months, we see the supply increasing and therefore rental levels dropping to a more affordable level compared to this time last year," said Fraser Bowen, the national director for investment at Jones Lang Lasalle, a property service company. Sebastian Trinh, the marketing director at Engel&Volkers, a property brokerage, also expects prices to fall further.
"We expect a further decrease in rent prices in June," he said. "Many people are still looking for properties in Abu Dhabi because there are properties available, but what's difficult is finding the right property." email@example.com