By Soren Billing
UPDATE 1: Rents in many areas of UAE capital unchanged in third quarter - CB Richard Ellis.
The rate of decline in Abu Dhabi rents slowed in the third quarter, while the number of sales dipped to “extremely low levels”, CB Richard Ellis (CBRE) said on Wednesday.
Residential rents in the UAE capital fell at a slower pace in the period than in the second quarter, when they declined by 5 to 10 percent, the real estate services company said.
“Our research has identified a downward movement in sale prices during Q3, with sales transaction activity at extremely low levels,” Matthew Green and Arlene Jimenea wrote in a report.
Apartment rents in central locations dropped by around 5 percent on the quarter, but housing units in several areas, including the central business district, were unchanged.
Off-island residential units continued to experience a steeper fall in rents, posting declines of 8 to 15 percent.
Both commercial sales and leasing transactions remained “restricted”, as owners and landlords wait for the economy to rebound, and buyers and tenants remain wary of a continued downturn, CBRE said.
Prime rental office rates were down by around 40 percent from the same period last year.
A proposal to relax rules on foreign ownership of companies in the UAE could act as a future catalyst, according to the report.
CBRE expects Abu Dhabi rents to remain weak for the remainder of 2009 but said they are likely to stabilise during 2010.
Compared to other emirates, the Abu Dhabi market should maintain a relatively strong position, boosted by undersupply across all asset classes, it said.
Demand in AD is massive and increasing. More than USD1T projects to deliver means loads of western expats with housing allowances...