Abu Dhabi rents to drop further - CBRE

Rental rates in Abu Dhabi will drop further this year as property supply outstrips demand, said real-estate consultant CB Richard Ellis Group Inc.

“Amidst a more positive economic outlook, downside risks still persist with the imminent delivery of a significant volume of new development covering both the residential and commercial sectors,” CB Richard Ellis said in an e-mailed statement today. “With supply forecast to outstrip demand over the next 12 months, a further drop in rental rates is inevitable.”

Property markets in the U.A.E. have been hurt more than other parts of the Middle East by the global credit crisis. Since September 2008, home values in Dubai slumped more than 60 percent and prices in neighboring Abu Dhabi dropped by half as banks curbed mortgage lending and speculators fled.

Average residential rents in Abu Dhabi mainland fell 30 percent in the fourth quarter from the year-earlier period and 5 percent from the previous quarter, CB Richard Ellis said.