Average rental rates in Abu Dhabi fell by 6 percent in 3Q2012
compared to the second quarter, according to CB Richard Ellis’s latest update on
the UAE capital’s property market.
The real estate consultancy’s report said that the emirate’s
ballooning housing inventory was creating greater affordability for residents
but meant that rents were fixed on a downward track, albeit still generally
higher than neighbouring Dubai.
The average rental rate for a studio on the main island of
Abu Dhabi stood at AED45,000 per unit per annum, compared to AED40,000 per unit
per annum in Dubai, the firm’s research found.
Abu Dhabi’s residential market has become characterised by a
“highly fragmented landscape” in which some areas and developments are
outperforming the market as a whole, said the report, with the largest declines
in rents hovering around the 9 percent mark.
The real estate firm’s update said there was no foreseeable end
to this trend, as higher quality inventory pressurised prices of ageing and
inferior units.
Recently delivered luxury developments in Abu Dhabi such as
Etihad Towers, Eastern Mangrove Residences and St Regis Residences were
commanding premium rental rates, underpinned by high occupancy and corporate
demand.
The delivery of high-end residential projects from World
Trade Centre Residences, Nation Towers and Landmark Towers in the near future
could pressurise rents at the luxury end of the housing market as competition
increases in this space, the report added.
Residential villas have been less impacted by any downturn
in rental rates, with quarterly declines generally ranging from 2 percent to 5
percent. Developments in core locations with higher quality facilities and
amenities continue to draw the most demand and attract higher rents, the update
said.
The CB Richard Ellis update said that a recent directive
from the emirate’s government requiring state employees to live locally could
raise the requirement for more affordable housing stock, which is currently in
limited supply.
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