According to the Q1 2011 report from United Arab Emirates property management company Asteco, the prices of property rental in Abu Dhabi carried on their downturn trend for the first quarter in year 2011. By having a substantial amount of new property supply either offered over the quarter or set in place for distributing for the months to come, the overall rates of house rental for Q1 2011 down by 8% for both villas and apartments.
The report also finds the rates of villa rental have fell for another 8% from the 5% decline in Q4 2010, which is also quite similar to apartments rental declining.
AS what been claimed by the CEO of Asteco Property Management, Elaine Jones, turnover is slow for the lower quality buildings on the main island,as a lot of tenants are taking advantage of ‘capped’ low leasing agreements. For houses which have turn out to be available, the cost of rent have declined considerably and this seem like going to be the trend for the year in 2011.
Apart from villas, the cost of rent for apartments also keep on reducing, with property owners turn to be more flexible on rents and price, in which causing the further prices falling for the lower quality end of the market.
The good news is, interest is improving for good quality large villas, as most people are now concern on the value of the money that they spend especially for tenants and families are looking to up-size. Rents for such large villas is rtaher stabilizing, especially in hot spots like Etihad Plaza which si featured with small compounds with good amnenities.
Abu Dhabi Property – Golf Gardens
the cost of rent for Villa at Golf Gardens which is situated next to the Abu Dhabi Golf Club are stable at Dhs250,000 upwards for a three-bedroom villa. Furthermore, in MBZ City rents for high quality villas closest to Mazyad Mall begin at Dhs140,000.
On the sales side, costs for villas have remained fairly stable over the last quarter, with numerous property owners staying obviously unwilling to sell as a consequence of teh condition of property markets. Costs in Al Reef reduced further, 15%, 6% and 8% for three, four and five-bedroom units respectively.
Whilst marketplace demand is obvious, buyers are worried about future rental yield possible. Costs for a four-bedroom home at Al Reef begin at Dhs1.5m rising to an entry cost of Dhs2.9m at Golf Gardens.
In apartment sales, the present trend in Q1 2011 is toward owner-occupiers instead of investors. Most people are practiciing the wait-and-see approach, due to remaining skepticism and unfavorable outlooks in rental yields.
“In general, investors continue to be diligent as they await stabilization of rental costs. For those searching at purchasing houses, delays in handovers coupled with home loan funding complications also are blocking transactional volumes. But we anticipate the impending new property deliveries and UAE’s increasing economic performance will enhance the scenario,” said Jones.
Because of the ongoing demand and supply mechanics, office leasing rates currently have carried on to slip, with costs per square meter dropping most in new property stock, fell 11% this quarter. Net efficient rents on new shell and core offices are priced between Dhs900 to Dhs1,600 per square meter apart from service charge. Deficiencies in fitted office space is also subduing demand.
Al Ain’s residential apartment and villa rental rates fell by an average of 5% and 1% respectively. A brand new law stopping apartment subdivisions is also now taking effect, with bigger, much more suitable stock because of come in the marketplace, which ought to see tenant uptake enhance.
Meanwhile, the office sector in Al Ain remains stable, with small new supply added this quarter. The anticipated cost jump in Al Ain office rents, as a result of new laws requiring businesses to have purpose-built facilities, has not however taken noticeable effect.