Al Khalidiyah in Abu Dhabi’s City Centre, Mohammed Bin Zayed City, an upcoming development located on the outskirts of the Island and Al Reem Island Gate District, the modern, highly sought after upmarket district; these communities in the capital have been ranked as the top three for experiencing the highest rent increases since January 2013.
Rental prices for 2-bedroom apartments in Al Khalidiyah increased 18 per cent since January 2013.
Median prices for 2-bedroom apartments in January 2013 stood at Dh85,000 and are now, currently, at Dh100,000.
Considering that Al Khalidiyah is located in the capital’s city centre, and that it has been around since the country’s younger years, buildings are older and supply is low.
Residents who have occupied homes in the capital since its early days have not been affected by the recent real estate market uptrend and are reluctant to shift to new areas as they benefit from cheaper rental prices agreed upon in the old contracts they signed.
“However, with the rental cap in the capital recently lifted, landlords can now align their rental rates to the current market value; this should surely cause a stir for old tenants who are up for renewals,” said Ann Boothello, Property Marketing Specialist at Dubizzle.
Tenants paying below the market prices are sure to be affected, as they either have to dig deeper into their pockets or find more affordable alternatives.
This will cause several of the units that were below market price to make their way back into the market seeking new tenants.
In the long term, this will cause the prices to go down.
Newer areas such as Mohammed Bin Zayed City and Al Reem Island, Gate district are in the spotlight for two key reasons, respectively.
Firstly, Mohammed Bin Zayed City offers more affordable and newer housing facilities compared to the city center and is located on the outskirts of Abu Dhabi, allowing residents to live in vicinity that is away from the chaos of the city and closer to Dubai should they commute to the neighboring emirate often.
For the latter, the lack of contemporary apartments in Abu Dhabi’s city center makes Al Reem Island one of a kind, as it lies in close proximity to the city center and offers an upmarket lifestyle, with modern facilities, reminiscent of Dubai’s Dubai Marina district.
“The capital has been experiencing gradual rental price increases over 2013.
“Some influencing factors are the ‘live local policy’ issued last September urging all government workers in the capital to reside in the city itself instead of neighboring emirates.
“In addition to this the Abu Dhabi government has invested a hefty $4.3 billion in infrastructure developments and social welfare projects in a long-term plan to diversify the economy from oil.
“This in turn has created jobs, and will continue to do so, causing an influx of expats gaining employment in the capital, thus a rise in demand for housing and accommodation,” said Boothello.