Abu Dhabi rents seen falling 30% by H2 - agent - Real Estate

Monday, 5 April 2010 7:34 AM

Rental values in Abu Dhabi are predicted to fall by up to 30 percent over the next five months as supply is seen exceeding demand for the first time in five years, it was reported on Monday.

According to the city's biggest real estate agent, rents had already fallen by 10-30 percent with the supply of housing units exceeding demand, particularly at Mohammed bin Zayed City and Khalifa City A.

In comments published by Emirates Business, Abdul Rahman Al Shaibani, General Manager of Al Ghanem Real Estate, the largest agency in Abu Dhabi, said he expected rents to fall by as much as a third once new buildings, including the 14 towers at Al Reem Island, are handed over later this year.

"For the first time there is an excess of supply both inside and outside Abu Dhabi," he told the paper.

The comments come a day after Cluttons reported that prices for leasing residential property in Dubai have still not reached a bottom.

Cluttons' report into the Dubai property market during the first quarter of this year revealed that residential rents had dropped by an average of 5.5 percent during that period. Property sales were down by an average 2.9 percent.

The research note added that the glut of new homes coming online in Q2 would see rent prices dropping still further, and added that the appetite for off-plan development had showed no sign of returning.

Al Shaibani added: "Outside the city the supply is very large. At the moment we have many villas in need of tenants, but unfortunately we cannot find people willing to pay high rents."

He said villa rents had slumped from AED350,000 per year to as low as AED200,000 while two bed apartments had dropped from AED180,000 to AED130,000.

Al Shaibani said he expected rents would fall by 20 percent inside Abu Dhabi and more than 40 percent outside the city in the summer.

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Posted by: Bayut Monday, 21 June 2010 2:37 PM[UAE] - england

Hi cool website. I actually came across this on Yahoo, and I am stoked I did. I will definitely be revisiting here more often. Wish I could add to the conversation and bring a bit more to the table, but am just absorbing as much info as I can at the moment.

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Posted by: JA Tuesday, 1 June 2010 3:08 PM[UAE] - UAE

We have lived in AD for 15 yrs, rents are definetely not getting any lower! We have lived in an apartment in the Tourist Club for the past 2 yrs, some friends have just moved into the same apartment as us and now have to pay 60K more than us. The parking where we live is an absolute nightmare making life with two babies here very difficult. We also live near a hotel that does valet parking and a building that is being knocked down..the problem just gets worse rather than better :o( At present were trying to find a villa as we have out grown our apartment....Wow we can't afford to move, even looking in the less exclusive area's run down villa's are 300K plus...unbelievable, how can people get away with these prices, do they not realise that we have to pay for housing out of our own pockets..COMPANIES DO NOT PAY OUR RENT!! We are in an awkward situation now, and may leave the Gulf after 15 yrs just because of people being greedy and making fast money out of expats :o(

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Posted by: abir Friday, 7 May 2010 1:04 AM[UAE]

First regarding Al Ghanem realestate, who said that no one have ever heard of them, they are in deed one of the biggest real estates agents in Abu Dhabi. As for the rents they have indeed decreased as per the article. Villas reached in Khalifa city "A" to as much as 350,000 Dhs. and reduced recently to 200,000 Dhs. as for the flats and studios. Now for the comment that some people had rent villas in suburb such as Al Raha for 200000 2 years before, it might be true but check with those people i am sure it was 2 bedroom villas. I my self already a tenant in a villa of 5 bedrooms in Khalifa city A for 350,000 Dhs. and I can see now that same specifications in Khalifa city has reached to as minimum as 200.000 Dhs. and I expect that rents will reduce more as I see lots of vacants villas with a sign TO RENT and they are still vacant for over a month. Thanks for the efforts and comments

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Posted by: mcna Sunday, 11 April 2010 8:26 AM[UAE] - UAE

The supply is in higher end category such as reem island etc. How can a middle class work afford to rent this. What is required is equilibrium in lower end accommodation units that an average person can afford, particularly in the city. Also, consider the georgraphic factors. People usually prefer to live in the city, the supply in the city is low. As such rentals are not coming down. Villas have recorded an average 0f 20% price reduction over past years. This is due to the new supply in suburban areas (Khalifa city, MB Zayed ciy etc)

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Posted by: hamza Wednesday, 7 April 2010 3:37 PM[UAE] - uae

ok first of all, i've been in Abu Dhabi and Dubai or the past 4 years and have never heard of Al Ghanem Real Estate. in fact no one i know has even heard of them either. So how are they the biggest real estate agency in AD? somebody pls tell me? Secondly, rents in AD are not falling, i've called several real estate agents in Abu Dhabi and the rents are still as high as ever! in fact you can not even find a place to rent! I would seriously recommend arabianbusiness to check the quality of their sources before writing such misleading articles! its directly effects their credibility!

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