By Andy Sambidge
New Asteco report also says rents for larger villas in expat areas fall by up to 20%.
Villa and apartment rents in Abu Dhabi continued to fall on average between 7-15 percent in the second quarter of 2010, Asteco said on Monday.
Its latest report on the property market in the UAE capital said apartments rents have fallen at a similar rate to the first quarter and that trend is set to continue throughout 2010 as more supply comes on to the market.
It is estimated that 4,500 apartments have been constructed with delivery underway, with an additional 8,000 apartments due for completion by the end of 2010, Asteco added.
Elaine Jones, CEO of Asteco Property Management, said: “The Abu Dhabi real estate market is in a period of transition moving away from an under-supplied landlord controlled market to one with improving quality and choice offering tenants more negotiating power.
"These changing market dynamics will continue to put downward pressure on rents, particularly older stock, which should be interpreted as a healthy move for an improvement in business.”
Villa rents in the UAE capital have also continued to decline by 2-8 percent in Q2 for traditional UAE national-owned investment villas, while more significant declines of up to 20 percent have been recorded for the five bedroom expatriate-owned villas in Al Reef, the report added.
Paul Maisfield, general manager of Asteco’s Abu Dhabi office, said: “We have not witnessed significant numbers of commuters looking to move back to Abu Dhabi, but with more quality supply to come within the next six months on Al Raha Beach and Reem Island, that could well change, subject to education, health and lifestyle infrastructure also being available.”
In terms of sales, on average, Asteco said prices for apartments and villas had remained unchanged and demand continued to be entirely focused on those developments close to completion.
The Abu Dhabi office market sector, Asteco said, had witnessed a limited number of open market transactions, with the majority of bulk leasing being taken up by the government, but with little detail on prices.
The rents have to atleast come down by 50% across all units old & new to actually reflect their worth. Sheer exploitation is going on. my sympathies with ppl who are being charged extremely high rent even in these circumstances at unreasonable terms. Stop agreeing or paying only a collective effort can make a difference.
Talking of real estate, are their more people out their who are having the sae problems from Aldar with the release of their new project Al Bandar, which they say is top quality. They issued letter mid May advising hndover from 1st june, last few days of May they told people sorry no handover possible due to a problem, then advised it would be a couple of weeks delay, then no it will now go into July, July arrives and nothing until around 6th July when they issue some letters stating now its 1st August. delays delays, and very poor communication from Aldar. What is going on? they say its a problem with Civil Defence, but the big question is, Why did they advise of offical handover when they did not have the correct permits? Nobody from aldar will give you a straight answer, they all tel a different story. Anybody else finding the same things? They just cannot deliver what they say, there are 511 apartments just sat empty all completed.
SOme how the Asteco Q reports have moved from getting the facts right in late 2008 and throughout 2009 to being based on perceptions and being superficial. They also got the rents totally wrong and their range does not depict the reality. I really loved Asteco reports but sad to see a drop in reality since last 2 reports. I hope they get the facts right.
The fact of the matter is that rents for quality apartments are still high and they are dropping for sub standard apartments. If Asteco went through the trouble of walking the streets they would realise that market range is lot broader than they have depicted in their reports. Marina Square is not as good as I thought, but Al Bandar looks great. As a company we realised that key investors into Abu Dhabi continue to be Indians, British and Australians.
Other than Khalifa city, out skirt of Mussafa, rents are not come down anywhere. And why should we pay in advance for a rented house? we do not get salary paid in advance. None other businesses pay you in advance whereas they give credit period. Real estate companies just take payment in advance, do not make proper maintenance on time. At the most, government should force property owners to accept 12 or 6 cheques for a rented house. Why anyone should pay to housing in advance? Can anyone answer to this please.
Shawn - you sound like you are the source of all knowledge -please give us valuable insight into the market in Abu Dhabi...
Come on Steve, if I think who you are, you know the truth mate. Do you agree with the rental rates provided by Asteco? You do not have to be the source of knowledge, but work in HR for a major oil company and the facts are fairly open. Anyway thanks for the sarcasm!