The softening rental market in Abu Dhabi has granted its tenants more bargaining powers. House prices are now more aligned with salaries and housing allowances and landlords are being flexible in terms of a number of cheques they are willing to accept. “We believe that the market is stabilizing for tenants in Abu Dhabi,” says Kika Pavese, General Manager, MD Real Estate. Sameer Barakat, Executive Director, Provis also agrees that the higher level of availability of properties is attracting tenants to upgrade to bigger homes. He says, “The focus is on good facilities and amenities, and with competitive prices. Landlords are providing ample incentives to retain existing occupants. Moreover, developers are creating more beneficial schemes to attract buyers such as rent-to-own schemes which motivate first-time buyers with lack of down payment funding to enter the market.”
More unit choices
The current pressure on the rents is a fantastic situation for the tenant, says Felicia Agmyren, Managing Director, Rex Real Estate. “We are experiencing a tenant’s market right now, meaning that the selection of units and potential to negotiate is greater than usual. It will also mean that there will be the flight to quality. Better areas will generate more interest, so the level of pressure on rents will vary depending on the area.”
She adds that for those searching for a unit now, the market have more options to choose from in better areas and with excellent views and ones currently renting a unit should consider renegotiating the rent if the tenant would like to do so. “Given the market being both a tenant’s and a buyer’s market, if someone is looking to live here for a few years, it could be a good idea to consider purchasing a property if the mortgage is less than the rent. We are expecting the market to start slowly moving upwards in the near future. This could, therefore, be one of the best times to consider negotiating a good price to purchase a comfortable home.”
Andrew Covill, Director, Henry Wiltshire International says that the current market is also making tenants try too hard to find the cheapest rent. “Tenants are looking for unrealistic rents and trying to negotiate with the agents’ terms and conditions to the point where they will not get the professional advice and service they deserve.”
He sees increased demand for smaller and cheaper apartments with some exceptions in notable developments such as Al Bandar and Saadiyat Island where availability is very tight. “In these sought after properties and areas, the general trend is bucked with very high occupancy rates and even waiting lists. Generally, there is a flight to quality where people can get a better property for the same price such as relocating from the Tourist Club area to Reem Island or Reem Island to Corniche or Al Raha Beach,” said Covill.
“Some people are taking smaller and cheaper units with flexible payment terms though. Furnished and serviced properties are more popular than ever. People are now buying again in increasing numbers as prices are down, finances are cheap, and the market stabilised. This has taken several tenants out of the market,” he adds.
“People are coming back! We are witnessing many families coming back to Abu Dhabi who left in 2014 and 2015. Oil service supply companies and Adnoc are hiring again, which will bring new tenants and buyers to fill the supply coming on board,” said Covill.