Wednesday, October 05, 2011

Abu Dhabi property market stable in Q3 2011

The Abu Dhabi real estate market has begun to show signs of stabilization during the third quarter this year. Apartment rental rates have begun declining, touching 6percent, in comparison to 8% and 9% during the previous two quarters, according to quarterly Real Estate Monitor by Asteco.

The rental rates for villas in the third quarter have been comparatively static, although villa rentals in off-island locations like the Mohamed Bin Zayed City and Khalifa City, continued to decline by 5percent on average.

The Al Zeina project at Raha Beach comprising 952 apartments, 26 penthouses, 124 villas, and 119 townhouses was one of the major new supplies in the market. Meanwhile, the Zone A units in Reem Island at Marina Square have been completed, while the delivery dates for individual investors of Zones B, C and D are yet to be announced.

According to Elaine Jones, CEO of Asteco Property Management, the strong rental demand is largely due to the desire of the existing residents to upgrade and secure an accommodation that has better value for money.

The market is still charactrised by low sales volume, which has had an impact on prices, although the sales enquiry levels continue to grow on par with delivery of completed projects.

Aldar has announced a rent-to-own scheme, to boost sales activity in the market. The scheme is effective for properties at Al Bandar, and Al Zeina. Tenants are allowed to pay a fixed rental for two years, with 100percent rent in the first year, 90percent of second year’s rent converted into a deposit towards purchase at current sales price, with more details about the scheme still awaited.

Such rent-to-own scheme is an effective way to stimulate demand, according to Jones.

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