• Home
• /
• Local business

Fourth Month of Stability in Abu Dhabi Rental Market

October was the fourth consecutive month of stability in Abu Dhabi’s rent market, according to a survey by Khaleej Times and property management firm Asteco.

The survey’s results, used to create the KT-Asteco Rental Monitor, indicate frequent and significant differences between listed prices and actual property transaction rates, which suggests that some landlords are willing to offer discounts if tenants come up with appropriate proposals, including bulk-leasing. On the other hand, some of the new residential towers under construction are being listed at a higher price than the prevailing market price. These towers are expected to set the trend and also help in differentiating between various qualities of apartments, the survey found.

The supply of apartments in towers that are old and not well maintained is increasing as tenants move from these apartments to better-quality buildings. Residential areas of Mussafah and Mohammed Bin Zayed have lot of towers nearing completion, and thus the supply will increase further in the Abu Dhabi mainland.

Although the market has started to inch upwards, no transactions are taking place at such high prices, according to Asteco. Tenants still perceive rents in Abu Dhabi as relatively expensive compared to the quality of apartments here. The “Dubai and drive” option, therefore, continues to lure commuters, as the quality of apartments in Dubai is often superior to what is available in Abu Dhabi.

The survey found that landlords have not given up hope that rents will rise in the near future, and, hence are unwilling to reduce their asking prices. They seem to be ready to risk losing revenues and keep their units vacant rather than trim their prices. Some apartments have remained vacant for the past six months or so.

Earlier surveys had found that apartment rents in Abu Dhabi were declining until June. The growing availability of units, a cash squeeze experienced by many tenants, and an internal shift of population were some of the most important factors contributing to this earlier slide.

But that downward trend took a pause for the first time in July, when rent levels remained unchanged from the previous month’s level.

The latest edition of the survey found that the average rentals for one-bedroom flats in the much sought-after Corniche, Khalidiyah and Bateen areas, and on the up-scale Khalifa Street and Salam Street, remained unchanged at Dh120,000 in October. Average rates for two-bed apartments in these areas were steady at Dh150,000, while average rents for three-bedroom flats also r+emained unchanged at Dh180,000.

Rents also remained stable for apartments in Passport Road, Defence Road, Tourist Club Area, Airport Road, Hamdan Street, and in outer areas such as “Between the Bridges,” Mohammed bin Zayed , Khalifa A and Khalifa B, the survey showed.

ramavarman@khaleejtimes.ae