Wednesday, April 13, 2011

Abu Dhabi rents drop by 8% during Q1 2011

Rents in Abu Dhabi have fallen by eight percent during the first quarter, and with the new supply entering the market, this signals a further decline during the coming year, says the latest report from Asteco, the leading property management firm.

According to the report, the rents in the UAE Capital have dropped eight percent during the quarter, across villas and apartments, declining by a further five percent during the last quarter of 2010.

Rents in Abu Dhabi had grown considerably since late 2008, owing to a housing shortage. But, with Abu Dhabi having invested billions in the industry, infrastructure and tourism, so as to diversify its oil economy, it has attracted thousands into the labour force, thereby increasing the demand for housing.

The sale prices for villas have remained comparatively stable over the last quarter, with several owners remaining reluctant to sell, owing to market conditions. As for the apartment sales, a wait-and-watch approach dominates, owing to ongoing uncertainty and negative outlooks in rental yields.

Moreover, the investors remain cautious, as they are awaiting the stabilization of rental prices, Jones said. For those seeking to purchase homes, delays in handover, coupled with mortgage financing difficulties are likely to hinder transaction volumes. But, with several new property deliveries, and the improved economic performance by the UAE, there can be an improvement in the situation.

1 comment:

Dubai Properties said...

After unusual down turn in real estate market all world is frustrated about its future. It is a beginning of down fall. May be this downfall will be worse in future because Abu Dhabi is also doing construction on a vast scale like Dubai.