Release of new stock will further push rents down in Abu Dhabi, with rents in Al Raha Beach already falling 14 per cent in the first quarter, as compared to the fourth quarter of 2011, says a new report.
A one-bedroom apartment is now available for between Dh80,000 and Dh100,000 per annum, while a two-bedroom unit can be leased for between Dh105,000 and Dh150,000 pa.
Rents in Central Abu Dhabi and Tourist Club Area have fallen by 10 per cent. Shams Abu Dhabi declined by five per cent.
In general, apartment and villa rents declined five per cent, Asteco said.
Elaine Jones, CEO, Asteco Property Management, warned that the increase in supply in the higher-end segment of the apartment rental market in Abu Dhabi was likely to result in further downward pressure on rents.
Close to 3,000 residential units are being delivered at Al Muneera and Al Zeina at Al Raha Beach, while 1,455 units are now ready for occupation at Marina Square, Reem Island.
The remaining 2,030 units at Marina Square will enter the market over the next six months.
The villa sector also witnessed similar declines.
Mainland properties in MBZ and Khalifa City fell 13 per cent as the law precluding the occupation of subdivided villas begins to impact the market.
According to Asteco, corporate tenants, previously leasing villas for their staff, were handing back the properties in favour of purpose-built apartments.
This led to strong demand for affordable apartments in MBZ and Mussafah.
Although reappearing on the market, owners of the vacated villa were finding it difficult to re-let, even at heavily reduced rents.
Apartment sale prices in Al Bandar, Al Zeina and Al Muneera on Al Raha Beach fell six, five and nine per cent, respectively, in the quarter.
Al Reef Downtown declined by six per cent.
However, sale prices for villas in Al Raha Gardens, Golf Gardens and Al Reef remained unchanged - reflecting demand for still vibrant for “good” quality villa communities.