By Andy Sambidge
Asteco report highlights widening gap between prime developments and rest of market
Apartments rents in Abu Dhabi fell by as much as eight percent over the last quarter, according to a new report from Asteco.
While apartments in good quality developments such as Al Raha Beach, Marina Square, and Shams Abu Dhabi, saw rental rates fall by just 1-3 percent, flats in older, less sought after buildings saw rental values drop between 4-8 percent.
Asteco said tenants living in Abu Dhabi have been taking advantage of select new prime developments offering high quality finishes and amenities at competitive rates after 7,400 apartments and 1,675 villas were added to the UAE capital's property market since the start of 2012.
According to its latest Q3 2012 report, many of the quality developments have generally been able to sustain their current rental rates over the last quarter given strong levels of demand.
However, landlords of older buildings formerly considered prime, have seen vacancy levels increasing and rates falling as tenants relocate.
"Consequently there is a widening rental gap between prime developments and the rest of the market," said Elaine Jones, CEO, Asteco.
"In addition, the new regulations being implemented linking the renewal of residency visas with accommodation arrangements is starting to impact the market with an increase in demand for mid-to-low budget, two-to-three bedroom apartments in central Abu Dhabi," added Jones.
Asteco's report also said that villa rental rates were relatively unchanged, with Al Reef showing the largest fall of four percent over the past quarter.
Apartment sales in Abu Dhabi during Q3 followed a similar trend to that of the rental market, falling by an average two percent across the board, Asteco said.
The villa sales market in Abu Dhabi saw limited transaction activity, therefore villa prices remained generally unchanged.