Friday, October 16, 2009

Abu Dhabi witnesses increased supply in residential sector

Abu Dhabi has witnessed an increase in supply of residential property, with about 1000 new apartments delivered to the market during the last quarter, said Asteco, one of the largest property services company in the UAE.

The apartments are mostly coming up in off-island locations, including Mohammed Bin Zayed City and Khalifa City, the company said in its latest third quarter report on the property scenario in Abu Dhabi.

This increase in housing supply in Abu Dhabi will result in landlords becoming more flexible with their pricing, Asteco points out in its report.

The research conducted by Asteco, which carries out market analysis, has also found that about 400 apartments will come on stream this month in the Abu Dhabi island, apart from the supply of apartments in Khalifa City A.

When the market faces increased supply, there will be more discounts on the offer, points out Elaine Jones, CEO of Asteco.

Currently people are more attracted to Dubai due to its cheaper rents and out of the perception that Dubai gives better value for money.

With better quality units being delivered in Abu Dhabi over the next 6 to 12 months, including Marina Square, Sun and Sky Towers, several daily commuters will consider these developments. Therefore, the prospective tenants will begin to target these developments against comparable properties in Dubai, particularly Dubai Marina, Jones said.

However, this aspect is not only the deciding factor to choose a location, Jones agrees. There are also other aspects to be taken into consideration such as giving notice to existing landlords, job issues, and schooling. Therefore, the market demand dynamics may not change until next summer, she points out.

Latest Asteco report states Khalidiyah and Corniche as the high-demand areas, although tenants have begun looking at development off Abu Dhabi island too.

Average rental rates on the Corniche for single, double and triple bedroom apartments are Dh.130,000, Dh.175,000 and Dh.220,000 respectively, down from their peaks of Dh.180,000, Dh.260,000 and Dh.350,000.

Developments with gymnasium and swimming pools have begun to command a premium and this is hoped to be the trend with the Marina Square, Meena Plaza and Capital Plaza coming online, the Asteco report said.

The report also highlights demand from small companies in the office market, increasing choice in Al Ain's residential market and expansion in the retail sector.

1 comment:

Dubai City Information said...

abu dhabi is indeed the place to be going forward. wealth, development and jobs are on the rise. when this happens more people want to live there, and when that happens property sector benefits.