Tuesday August 4 2009

ABU DHABI — The declining trend in apartment rents in Abu Dhabi, prevailing in the first half of this year, paused in July, according to a survey by the Khaleej Times and Asteco, a property management firm.

The survey, used to create the KT-Asteco Rental Monitor, found that apartment rents in most of the central areas of Abu Dhabi remained unchanged in July from the prevailing rates in June. The earlier editions of the monthly rental monitor had anticipated the continued correction due to the internal population shift and new housing units coming online.

The survey found that the constraints in obtaining housing advances from employers and personal loans for upfront rental payment for an entire year could have contributed to the present stagnation in the rental market. Some companies have suspended payments of housing allowance to bolster cash flows, while banks have curtailed lending to expatriates. In spite of the inability of tenants to arrange the amount, the survey found that a majority of the landlords insisting on one cheque payment.

The summer holidays could have also contributed to the stalemate in the market. Transactions have noticeably slowed down as potential tenants delay their decision in anticipation of a decline in rents to resume after the holidays. Meanwhile, residents continue to move out of the capital to newer developments in Dubai.

The average rentals for one-bedroom flats in the much sought-after Corniche, Khalidiyah, Bateen, Khalifa Street and Salam Street remained unchanged at Dh120,000 in both June and July, while rents of two-bed apartments stood at Dh150,000. The rents for three-bedroom flats also remained unchanged          at Dh180,000.

The rents for one-bedroom apartments had come down from Dh150,000 to Dh120,000 between April and June in these areas, while it dipped from Dh180,000 to Dh150,000 in the case of two-bedroom flats and Dh255,000 to Dh180,000 for three-bedroom flats.

The trend was similar for apartments in Passport Road, Defence Road, Tourist Club Area, Airport Road, Hamdan Street, as well as in the outer areas like ‘Between the Bridges’, Mohammed Bin Zayed, Khalifa A and Khalifa B.

The annual rent for a one-bedroom apartment in Passport Road, Defence Road, Tourist Club Area, Airport Road, Hamdan Street, for instance, was about Dh100,000 in July. The two-bedroom apartments leased for about Dh120,000 and three bed-rooms flats rented for Dh150,000 in July. The rates had come down from Dh125,000 to Dh100,000 for one-bedroom flats between April and June in these areas, and from Dh165,000 to Dh120,000 in the case of two-bedroom flats and from Dh190,000 to Dh150,000 for three-bedroom units.

Source: Khaleej Times