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The steady fall in rents is due to swelling supply and a surge in demand for apartments outside the capital (FILE)
Recovering supply is pushing rents in Abu Dhabi further down and forcing landlords to unlock their property and abandon a government-approved five per cent annual rent increase.
Some of the owners have also started to offer a three-month free trial rent for their villas to entice customers following a sharp rise in such rents during the few years that preceded the 2008 global fiscal crisis.
Over the past one year, rents in Abu Dhabi that has been classified as one of the most expensive cities in the world tumbled by 30-45 per cent, a real estate agent was quoted Sunday as saying.
“This is forcing many landlords to abandon their policy of locking their property units to wait for rents to increase again…they have started to unlock them to meet their massive financial commitments towards banks which had funded their property,” said Hassan Hammadi, chairman of Alwaha Properties in Abu Dhabi.
“Some others have stopped imposing the five per cent rent increase in the contract although this increase is still officially in force,” he said, quoting by the Arabic language daily 'Emarat Al Youm'.
He said low demand and a surge in supply have also forced some property owners to offer their villas free for two or three months on a trial basis and provide free cleaning services for tenants along with other incentives aimed at attracting customers.
Another real estate agent in the capital, with a population of around one million, said rents in Abu Dhabi city has declined by nearly 10 per cent since the start of this year.
Mahmoud Al Saeedi, owner of Dar Alahbab real estate firm, attributed the steady fall in rents to swelling supply and a surge in demand for apartments outside the capital following a sharp expansion in construction activities.
“The average rent value in Abu Dhabi is now around Dh100,000 compared with more than Dh170,000 in the previous period…this is a very big decline,” he said.
The paper quoted another property expert as saying he expected rents to slide further in summer.
“This is because of summer annual vacations by expatriates, a decline in demand for property after the rise in costs of education and health, and the end of work contracts by many workers, mainly those in the construction sector,” said Nassir Al Hammadi, owner of the Gulf Pearl real estate management company.
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