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.
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