1-bed in Abu Dhabi for Dh45,000: MBZ City drops

Only 750 new homes were delivered in the first quarter. (Najeeb Mohammed)

Rents for one-bed apartments in Mohammed Bin Zayed City in Abu Dhabi declined 10 per cent in the second quarter 2015 compared with first quarter 2015, with average rentals at Dh45,000 per annum (pa), according to a report.

The second cheapest area to lease is Al Ghadeer, where average rents for one-bed units is Dh52,500 pa, down three per cent quarter-on-quarter (q-o-q), Land Sterling, a chartered surveyors and property consultancy, said in its latest Abu Dhabi Property Watch report.

Though Al Reef Downtown registered a five per cent increase in rentals, leases average at Dh84,000 pa, the third most affordable community in the capital.

The costliest area to rent is Saadiyat Beach - average rent for one-bed dwellings - is Dh117,000 pa, but are down three per cent q-o-q.

Tourist Club Area and Muroor registered a 9 per cent increase in rentals, with average rents at Dh93,000 pa and Dh100,000 pa, respectively.

The report said overall rental activity remained strong across all investment areas as most of the areas maintained positive quarterly and yearly growth.

Affordable housing segment continues to be under-served despite high demand with little respite expected in the near term as new supply is skewed toward high-end properties.

The emirate removed the rental caps in November 2013, after which certain areas experienced over 50 per cent rental hikes, the consultancy said.

In June 2015, ‘Emirates 24|7’ reported that the Abu Dhabi Department of Municipal Affairs is likely to unveil a provisional rent index by year-end.

Read: Abu Dhabi expected to launch 'rent index' by year-end

Prices stable

The report said average apartment sales prices remained sluggish in the second quarter 2015, as market conditions remained hostile due to oil price volatility that continues to stunt growth.

The overall quarterly prices in the investment areas remained stable, with maximum fall witnessed in Al Reem Island at 5 per cent. By end-2015, Al Reem Island may experience further pressure price-wise as new supply is expected to come online, the consultancy said.

Al Raha Beach continued its northward march, registering nine consecutive quarters of price increases. The average growth has been 5 per cent.

Prices of Al Reef villas, however, declined 25 per cent from its peak value in second quarter 2014 to Dh830 per square foot in the second quarter 2015, registering the highest year-on-year fall across investment areas, the report said.

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