ABU DHABI // The slide in rents in the capital will stop with the expected influx of people moving to Abu Dhabi over the next year, experts predict.
The Executive Council’s decision that all Government employees must move to the emirate within a year will be a “major boost” to the residential market, according to the major real estate companies.
Jones Lang LaSalle’s head of research, Craig Plumb, said a shift of employees would have an impact on residential demand and prices, as the Government was the emirate’s largest employer.
Mr Plumb said the recent high levels of new stock in the market would normally have meant an increase in the number of vacancies.
The latest quarterly report on the housing market, published in July, said about 11,000 apartments and villas will be completed in 2012.
“The balance in the market has been in the tenant’s favour, as the average rents have been declining,” he said.
Rental prices are set to fall further in the next six months. It currently costs about Dh120,000 a year for a quality two-bedroom apartment.
But Mr Plumb said the council’s ruling would now “strengthen the hand of the landlords” in their rent negotiations with tenants.
According to Matthew Green, head of research at CB Richard Ellis, landlords would be able to “automatically think about higher rents and be more aggressive” towards tenants.
“Properties are likely to see a boost in demand, but it’s still a tenant’s market,” he said.
Almer Agmyren, the managing director at the Abu Dhabi-based Rex Real Estate, said the capital will get busier and livelier as “more people will be spending money”.
He said that demand for housing on Saadiyat Island had grown enormously.
“Saadiyat is the next destination in Abu Dhabi,” he said, adding that one-bedroom apartments were starting at Dh134,000.
molson@thenational.ae
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