Good news for Abu Dhabi apartment hunters. Lease rates continue to decline as more supply comes on the market, a study by Landmark Advisory Group says.
The steepest drops were in the Corniche area, where rents have fallen 16 per cent in the three months since August 1, the consultancy says. Overall, apartment prices fell 5 per cent in the three months, with landlords facing increased competition from new buildings in Abu Dhabi and Dubai.
Abu Dhabi tenants "are no longer prepared to accept sub-standard quality for premium prices", said Hesham Ikhwan, the Abu Dhabi branch manager for Landmark.
But Peter Samaha, the director of Quest Property Services in Abu Dhabi, warned the overall numbers may be misleading.
"It really depends on the individual property," Mr Samaha said, adding that although prices in some areas might be declining, there was still a "steady stream" of people looking for units. "Demand is there."
In fact, Landmark's numbers show a wide disparity from project to project. Prices for villas in Al Reef, the off-island development, fell 15 per cent since the start of August because of "inconvenient location and landlord competition", Landmark concluded.
Most landlords in Al Reef are expatriates, "meaning that they are more interested in continued cash flow rather than holding out for higher rents", says the report.
But villas in Golf Gardens, a similar development, posted a "marginal increase", the study found. Overall, villa prices dropped 4 per cent in the three months.
In the months ahead, Landmark says new developments such as Al Bandar and Marina Square will put more pressure on landlords of existing projects, "leading to a complete recalibration of rents around the new developments, which often offer better amenities and facilities".
"With rents continuing to fall in Dubai, rents in Abu Dhabi - especially for the lower quality on-island buildings - will need to decline further to continue to attract demand," said Jesse Downs, the director of research at Landmark.