Abu Dhabi villa rents have fallen by as much as 20 per cent since last October as the completion of new housing developments has helped ease the accommodation shortage. Apartment rents in the capital also fell slightly in the fourth quarter of last year, a report by the property services company Asteco shows.
While it is now as much as 20 per cent cheaper to rent a villa on Abu Dhabi Island, strong demand for off-island villa developments such as Al Raha Gardens and Sas Al Nakhl helped stabilise rents over the quarter after sharp declines earlier last year. An influx of expatriates in recent years has helped sustain demand for homes in Abu Dhabi despite sharp declines in property prices over the past year, while the construction of new estates and apartment blocks has failed to keep pace with demand from the rising population.
The cost of renting a two-bedroom apartment fell between 5 and 10 per cent as more units became available, the report said. Although rent declines in Dubai softened in the last quarter, they were still up to 20 per cent cheaper than those in Abu Dhabi. The price disparity has prompted many people working in the capital to commute from Dubai. "This trend is not expected to change in the short term without the perceived value for money versus location issue being addressed," said Elaine Jones, the chief executive of Asteco.
About 2,000 new apartments are due to become available for rent on Abu Dhabi Island in the first half of this year, with a similar number in the second half, Asteco said. Marina Square, Sun and Sky Towers and Al Bandar will also provide about 6,500 apartments by the end of the second quarter, with a further 1,286 units due to come on stream at Al Muneera by the end of the year. On the retail side, rents for ground-floor shops and showrooms in Abu Dhabi slid between 5 and 10 per cent over the past three months, continuing the downward trend from earlier in the year, Asteco said.
"Despite the drop, there is in many cases still a mismatch between landlords' rental expectations and those of prospective tenants, and thus an increase in available vacant space is evident, providing retailers with options and thus negotiating power," Ms Jones said. @Email:agiuffrida@thenational.ae
