Traditionally, one of the most important things that an expatriate in the UAE needed to worry about was findinga decent home within a reasonable budget. Over the past 18 months this process has become considerably easier, especially in Dubai, with tenants having ample choice and extensive bargaining power with regards to rents, as well as payment terms. With rents in Abu Dhabi having fallen over 20 per cent in 2009 and by 5 to 10 per cent in the first quarter of this year, this trend is finding its way to the capital as well. However, while there have been positive changes, finding a place to live in Abu Dhabi is still nota task for the weak at heart.
In order fully to understand the situation in Abu Dhabi's residential leasing market with regards to affordability, availability and quality, we decided to go ahead with a mystery shopping exercise, pretending to rent a home in the city. We started by deciding on an appropriate budget for the study and looked at income categories. Our analysis showed that the low-income households made up of skilled and unskilled labourers, drivers and maids tend to live either in company-provided accommodation or sharing accommodation in extremely low-budget areas. On the other hand, the high-income group has always helda position where rents are the least of their worries. As such, these two categories were excluded from this study.
According to the 2008 Department of Planning and Economy's Household Income Survey, 30.7 per cent of Abu Dhabi's households fall into the lower-middle and upper-middle income category, earning between Dh70,000 and Dh300,000 per annum. The lower-middle income group includes core workers such as nurses, salespersons and administrative staff while the upper-middle group includes professionals, engineers and bankers. These two categories lease residential space and are affected most by the rise or fall of rents. Assuming that 25 per cent of income is allocated to rent, the maximum amount available to spend is Dh75,000. Accordingly, we started witha budget of between Dh60,000 and Dh75,000 and decided to look for studios and one-bedroom apartments.
Dubai: a comparative view
Before we moved to Abu Dhabi, we scouted around in Dubai to get a feel of what you could get for the same budget in the new and improved tenant-friendly rental market.
Within this budget, we found ample studio apartments in most of Dubai's new and upcoming locations, including Jumeirah Beach Residence, Dubai Marina and the Greens. One-bedroom units in Jumeirah Lakes Towers and Dubai Marina were also feasible, as were two-bedroom units in Discovery Gardens and International City.
While our budget was quite reasonable for Dubai, let's analyse what you could get for the same in Abu Dhabi. We started our search within the city, looking at apartment buildings in areas such as the Corniche, Hamdan Street and Khalidiya. We looked extensively, contacting a number of agents and landlords, but to no avail. These locations remain extremely expensive and out of reach, with the cheapest one-bedroom that could be found offered at Dh80,000. The landlord said no maintenancewould be provided and the unit would have to be taken on an ‘as is' basis — which meant gaping holes in the ceiling, broken kitchen cabinets and nails protruding from all the walls.
Also, the unit was in one of the oldest buildings in the vicinity, with very little parking space and constant construction works around.
We did find some ‘sharing apartments' though — large four-bedroom and five-bedroom apartments that had been converted into a number of smaller units and had been offered to bachelors and families. One of these was relatively impressive — a proper one-bedroom unit with a living area, bedroom, own kitchen and own bathroom, right on Airport Road, on the ninth floor of a building.
It also had a balcony, an amazing view of Abu Dhabi city and the facility to pay on a monthly basis. However, the building itself was so old that we worried about whether it would be able to withstand the tremors of an earthquake in Australia!
We then moved away from the main city and started looking at areas such as Al Nahyan and Muroor and found that these were also extremely old, in dilapidated buildings or extremely expensive, not fitting our budget.
Moving away from the Island
We were then advised that good quality apartments within the budget that we had would be hard to find on the Island, and that we should look beyond at areas such as Mussaffah, Mohammad Bin Zayed City and Khalifa City A.
We did find these locations to be affordable with decent one-bedroom units available within our budget. However, these areas seemed extremely far away from the action in the city, with peak-time heavy traffic — not something to boast about.
We decided to stick to the Island. While we were scouting around on the mainland, we also heard of a concept, possibly unique to Abu Dhabi — flats within villas. These came in a number of different types — units within old villas and new villas, units with or without partitions, units with their own entrances, with the prices varying accordingly.
So we restarted our search lookingat these types of units in the main city areas such as near Al Wahda Mall, Karama and Khalidiyah.
The units available that fitted our budget were again disappointing to say the least — we were shown flats within villas that were in complete shambles, flats that had been built out of old ply on the roofs of villas, parking sheds that had been converted into flats and servants' quarters which were being promoted as flats with individual entrances.
Kitchens inhabited by roaches, floors with the ugly left-over glue of old carpets, damp walls, smelly bathrooms with broken bathtubs — we saw it all.
We had almost given up our search when we chanced upon villas in Muroor and Mushrif. While the majority of these, especially the ones in Muroor were quite old and messy, we did find a few good-quality villa apartments in both locations which were extremely livable and affordable.
While the rent for a one-bedroom unit ranged from Dh50,000 to Dh75,000, prices depended on how close you were to the city, on the age of the villa and on what was around in the immediate vicinity (proximity to Carrefour, Airport Road, or Abu Dhabi Sports Club).
However, a word of caution — within these units, you would need to makesure that you found something witha good layout, since in quite a few cases the kitchens were made in the original walk-in-closet in the bedroom, which meant issues with regards to ventilation and cooking odours in the bedroom. However, these seemed to be the best possible option given our budget constraints and our desire to be close to the city, and are highly recommended.
Also, over the one month that we conducted the research for this article, prices seem to have declined by over 5 per cent, with landlords now willing to accept more than one cheque.
It is possible that by the time this article goes to print, these prices may have declined further.
According to Landmark Advisory, "While average rents in Abu Dhabi are likely to keep sliding, we expect the declines to be more moderate in the second quarter of 2010. Up to now, rental declines in Abu Dhabi were directly associated with the influx of more supply, but additional supply will not arrive until the third and fourth quarters of 2010 when we expect rents to decline further".
As such, the next few months should be much better for everyone lookingfor affordable homes in Abu Dhabi. Best of luck to those who are.
Typical Listed Rents for Apartments in Dubai
Jumeirah Lakes Towers 30,000-50,000 50,000-75,000 65,000-100,000
Discovery Gardens 25,000-40,000 40,000-55,000 55,000-70,000
Dubai Marina 40,000-60,000 60,000-90,000 75,000-140,000
Jumeirah Beach Residence 50,000-70,000 70,000-100,000 100,000-160,000
The Greens 40,000-60,000 55,000-85,000 80,000-120,000
International City 20,000-30,000 30,000-45,000 50,000-58,000
Typical Listed Rents for Apartments in Abu Dhabi
Al Nahyan 75,000-80,000 80,000-130,000
Mushrif 40,000-50,000 50,000-75,000 80,000-100,000
Muroor 30,000-55,000 45,000-90,000 90,000-135,000
Khalifa City A 25,000-45,000 55,000-85,000 80,000-105,000
Mussafah 35,000-50,000 45,000-75,000 75,000-90,000
Mohammad Bin Zayed City 25,000-45,000 45,000-70,000 70,000-105,000