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Abu Dhabi rents up to 40% higher than Dubai
A typical two bed apartment in Abu Dhabi now costs up to 40 percent more than the same type of unit in Dubai and workers in the UAE capital are increasingly looking to live outside the city, a new report by Jones Lang Lasalle (JLL) said on Tuesday.
Its latest Dubai city profile report said Discovery Gardens was becoming more and more popular with Abu Dhabi workers because Dubai was now by far the cheaper option for rental accommodation.
The trend is part of a reverse being seen in Dubai where tenants who moved out of the city in favour of Sharjah during the rental boom of 2007/08 are returning as places such as International City become affordable, with rental values down by more than 30 percent in 2009, the report added.
"Rents in Abu Dhabi are now significantly higher than those in Dubai due to the capital's lack of affordable new supply," JLL said, adding that a two-bed apartment in the UAE capital now cost between AED180,000-200,000, 30-40 percent more than Dubai.
"For this reason, many of those working in Abu Dhabi have opted to shift to Discovery Gardens and other projects to the south of Dubai where they can pay lower rent and still commute to and from Abu Dhabi relatively quickly," the report said.
JLL predicted that a combination of improved affordability and falling household size would "naturally increase residential demand" in Dubai, adding that the residential market could start to stabilise in 2010.
However, analysts ruled out a return to the pricing levels experienced in the real estate boom period of 2007 to mid-2008.
The report also said that while sales transactions in Dubai had fallen about 55 percent since the second quarter of 2008, leasing transactions had risen in 2009, driven by relocations from other emirates and upgrades in living accommodation.
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Comments 1-4 of 4
Posted by AshSri, AbuDhabi, UAE on 12 October 2009 at 15:49 UAE time
There many new projects out in AbuDhabi oil sector with ADCO,ADGAS,GASCO,ADNOC-Concophilips etc....(about 40bUS$) which are all scheduled to start from 2010 will fuel more demand to related manpower as well as accomodation. I guess there is noway prices are going to get down in Abu dhabi atleast for the next 3years.
Posted by Oli69, Dubai, United Arab Emirates on 7 October 2009 at 18:08 UAE time
The recovery of property prices will depend of course on the 'real economy' and therefore the basic laws of supply and demand, but I would add the quality and location of properties will be important as well. I am not too sure the prices in Dubai will fall further, even though supply will increase, as I believe Dubai will pick up again (slowly of course), as the infrastructure and legislation improves, new jobs will be created and new expats will immigrate.
At that point, 'prime' properties (mainly Emaar properties) will keep their value and properties that were poorly built will (rightly) be empty and loose value.
Therefore, we will need to differentiate between different areas, as I foresee winners and losers in the real estate market.
Posted by H.I, Manama, Bahrain on 7 October 2009 at 12:12 UAE time
With new 30000 residential units coming to the market in 2010/2011 the rents and prices will fall in Dubai no doubt.
A fair 2 bedroom rental price should be 35000 to 60000 Dhs maximum like it was in 2003.
Abu Dhabi rents will drop in 2011-2012 as the new projects will start to be delivered and expats working on these projects will start to leave.
So Abu Dhabi vampires or landlords will enjoy few more years to feast on the blood of their expats.
For Dubai landlords the meal is over and things are back to normal at least for the next 5 years till another cycle of construction begins.
Posted by gamby on 7 October 2009 at 06:20 UAE time
coming the year end, real estate and building owners will definitely do all publicitiies just to push the price up more! upon reading this article, dubai's real estate vampires and building owners are again alive and kickin'. time to rejoice blood suckers!