By Andy Sambidge
New figures show narrowing of living costs in UAE cities but disparity remains for sales prices
The rental gap between Dubai and Abu Dhabi is narrowing with the UAE capital becoming more affordable, according to UAE-based real estate portal propertyfinder.ae.
Based on real-time data from listings on its website, it said rents in Dubai were on the rise while those in Abu Dhabi were showing a "slight decline since the start of the year".
Prices for both apartments and villas in the two cities now showed "negligible differences" while sales prices still showed a disparity, the company said.
"Living in Abu Dhabi is becoming just as affordable as that in its neighbouring emirate," propertyfinder.ae said in a statement.
"This industry dynamic alongside the recent relocation decree and quality housing units entering the market is making it possible for Abu Dhabi residents to enjoy similar standards of living to those they enjoyed in Dubai," it added.
Earlier this month, Asteco said average sale prices for high quality residential units in Abu Dhabi rose by up to 26 percent in the last year.
Despite the rise, average prices in the third quarter of 2013 are still between 20-50 percent below 2008 peaks, the real estate consultancy said.
Renan Bourdeau, managing director, propertyfinder.ae, added: "The average price for renting an apartment in Abu Dhabi today is AED143,000 while the same in Dubai is around AED142,500.
"A villa, on the other hand, will cost you on average AED246,600 to rent in Abu Dhabi and AED256,000 in Dubai - negligible differences - and evidence of the change in rental pricing in the two cities."
However, the property portal also said that sale prices across the two emirates continue to show a disparity.
The average price of an apartment and villa in Dubai stands at AED2.6 million and AED6.5 million respectively, while in Abu Dhabi the standard price for an apartment is AED1.8 million and AED3.1 million for a villa.
"While the closing rental gap may be a positive sign for Abu Dhabi's property market, it remains to be seen what the effects of the increasing stock yet to hit the capital will be," said Bourdeau.
"It will be interesting to observe if the current growth in housing demand in Abu Dhabi driven by government spending and the relocation ruling will persist despite continued additions to supply over the next few years," he added.For all the latest real estate news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
At these prices the rental yields in Abu dhabi are 30% higher in Abu Dhabi. Which basically means Abu Dhabi real estate prices are going to increase significantly in the near future to be in line with Dubai prices.