Property | General

Abu Dhabi rents set to decline

More than 9,000 residential units to be added to the market this year

  • By Shehab Al Makahleh, Staff Reporter
  • Published: 13:48 July 31, 2012
  • Gulf News

Abu Dhabi skyline
  • Image Credit: Gulf News archive
  • The skyline of one of Abu Dhabi's prime areas.

Abu Dhabi: Abu Dhabi rents are slated to decline further in line with future additions to supply.

Yet, this sector is “becoming more competitive and moving further in favour of tenants, as a large number of high quality projects are delivered across all sectors”, Jones Lang LaSalle said in a report published on Tuesday.

The report revealed that there was a significant increase in supply at a time of weak demand and tight economic conditions which forced rents to fall in the aftermath of “unsustainable highs of the boom years”. “Q1 of 2012 may have only recorded a decline of 4 per cent in the prices of Abu Dhabi properties but during the Q2 and Q3, more than 9,000 more residential units will be added to the market which will cause more problems for Abu Dhabi property sector,” the report showed.

Market good for investors

Craig Plumb, director of research for Jones Lang LaSalle, told Gulf News in an interview that Abu Dhabi market is good for investors and realtors. “The threat of increasing supply and liquidity constraints will further push the market prices down. A number of residential, office, hotels and retail projects are in the pipeline this year. This will push rates down from sustainable highs,” clarified Plumb.

“The government of Abu Dhabi has introduced several policies and laws to protect investors. All these efforts have paid off and just as well reflected in the Jones Lang LaSalle Transparency Index report that has earned Abu Dhabi the second-highest spot in the Mena region after Dubai. This can significantly boost investors’ trust in the region,” according to the report.

David Dudley, Head of Abu Dhabi Office, Jones Lang LaSalle Mena, said: “Approximately 2,900 additional residential units were delivered in Abu Dhabi during Q2. Additions to supply included Rihan Heights in the Grand Mosque District, two towers on Marina Square, Amaya Towers on Shams and new villas in Bloom Gardens.”

Dudley added: “The majority of these units are in Rihan Heights and Bloom Gardens in the Grand Mosque District, Burooj Views and Marina Blue on Marina Square and Amaya Towers on Shams.”

“These deliveries bring the total residential stock to approximately 199,800 units at the end of Q2 2012. Up to 11,000 units are scheduled for completion in H2 2012 but it is expected that many of these projects will experience further delays at the final stages of approval,” said Dudley.

He clarified that approximately two-thirds of the upcoming supply comprises apartments, with the majority of the upcoming villa supply being within Emirati housing communities such as Al Falah and Watani.

According to the report, most of the supply for delivery in 2012 comprises additional units in master planned developments including Reem Island, Al Reef Villas, Danet, Saadiyat Island and Rawdhat. Upcoming supply also includes Nation Towers on the Corniche, Al Bateen Park and Marasy in Bateen.

Comments (4)

  1. Added 19:25 August 9, 2607

    I would like to say someting on ban on sharing accomodation.If goverment decides to ban the accomodation goverment must see that a person earning 5000 dhs in Abu Dhabi is allowed residence visa to bring is family. How can a person earning even 7000 ds pay 55000/- dhs for 1 bedroom hall kitcen in Abu Dhabi. Does this make any sense? So reduce this rent and people will surely live in thier own flats.!!!!

    Anonymous, Abu Dhabi, United Arab Emirates

  2. Added 19:25 August 9, 2607

    I request govt to take necessary steps to reduce rents which will attract more residents to bring family here.

    Anonymous, Abu Dhabi, United Arab Emirates

  3. Added 19:25 August 9, 2607

    I disagree with this news. Even though the influx of supply of property will take place in Abu Dhabi, the Government has prepared a strategy to counteract by enforcing ban on sharing villas. I am pretty sure, if this is counted, then the demand and supply will not deflate the rent as stated in the above article.

    Maria, Abu Dhabi, United Arab Emirates

  4. Added 10:33 August 1, 2012

    From last four years I am a resident of Abu Dhabi, since 2008 rent came down but its still very high, in 2008 I was paying Dh3000 for one room in sharing and now in 2012 I am living in a villa sharing room and paying Dh2500 per month. Agreed it came down but look at the other things like parking its paid all over, look at the inflation its going higher every day. The rent should be reasonable so that those people who are giving golden time of their life could secure their future otherwise I have so many examples people are coming here to make money but after a long time when going home with empty hand no saving nothing. I hope the government should take some corrective measures to ease expats.

    Anonymous, Abu Dhabi, United Arab Emirates

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