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19 March 2024

Abu Dhabi 2BR rents cheaper than Dubai

Published
By Parag Deulgaonkar

Average asking rents for two-bedroom apartments in Abu Dhabi are lower than Dubai, comparison of data from real estate consultancies reveal.

While rentals for two-bedroom apartments across Dubai are rising, average asking rents for prime two-bedroom units in the capital remained unchanged in the third quarter 2013, according to a Jones Lang LaSalle (JLL) report.

Annual rent stood at Dh130,000 per annum in the third quarter.

In its third quarter report, Asteco Property Management put average rents for two-bed units in Corniche at Dh135,000 per annum, Marina Square at Dh130,000 pa, Saadiyat Beach and Shams at Dh150,000 pa, respectively.

The same report stated average annual rents of two-bed units in Downtown Dubai, Palm Jumeirah and Dubai Marina at Dh140,000, Dh113,000 and Dh160,000, respectively.

According to JLL, rising rents in Dubai has narrowed the gap of rental difference between the emirate and Abu Dhabi.

Earlier this month, propertyfinder.ae, UAE-based real estate portal, said the rental gap between Dubai and Abu Dhabi was narrowing.

"Living in Abu Dhabi is becoming just as affordable as that in its neighbouring emirate," the portal said in a statement.

Prime developments

JLL believes prime developments (good location with efficient designs, quality management, high quality amenities and facilities, and sufficient parking) will continue to achieve higher premium in 2014 as well.

The global consultancy added that as renters preferred newer communities, secondary areas with old buildings witnessed a fall in lease rates.

Demand for apartments remained strong due to factors such as government spending initiatives leading to job growth such as the airport expansion, the Etihad railway and the museums on Saadiyat Island; government entities requiring Dubai-based employees to relocate to Abu Dhabi in response to the new regulations and continued improvements to Abu Dhabi’s urban offering.

Nearly 2,700 residential units were delivered in Abu Dhabi during the third quarter with majority of the units located within Rawdhat and Danet on Airport Road, Al Reef Downtown, Mangrove Place on Reem Island, Al Falah and the Khor Al Raha apartments at Al Raha Beach.

An additional 4,000 units are scheduled to be delivered to the market by the end of 2013.

Investment areas

Average residential asking prices continued to rise within investment areas.

Prices went up by 5 per cent during the quarter to touch Dh12,100 per square metre, following 8 per cent and 5 per cent growth during registered in the first and second quarter 2013.

Average asking prices for both apartments and villas increased to Dh14,200 per sqm  and Dh10,500 per sqm, respectively.

JLL, however, pointed out that the increase was restricted to prime buildings within Investment Areas and did not represent a market-wide recovery. It stated that price growth was not been witnessed elsewhere.