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Abu Dhabi's property market registered an average gross yield of 5 per cent, with some areas reaching 8.8 per cent, amid a relatively flat performance in the first six months of the year, according to a report by Chestertons Middle East and North Africa (Mena).
''Although the market has flattened further in the second quarter and witnessed declines as sales and rental rates dip further, rental yields are still rewarding investors and proving that the capital is still the place to be,'' said Declan McNaughton Managing Director — UAE, Chestertons Mena. ''Apartments in Al Reef Downtown, Al Ghadeer and Al Muneera notched yields of 8.8 per cent, 7.7 per cent and 7.5 per cent respectively.''
Apartments saw a 2 per cent decrease in rental rates during the second quarter compared with an increase in the first quarter, with average annual leasing rates for lower-range studio and one-bedroom apartments commanding Dh40,000 and Dh52,000 respectively.
''On average the residential rental market has dropped by 2 per cent with the luxury end of the segment bearing downward pressure due to a reduction in spending, compounded by cuts to government spending due to lower oil prices,'' said McNaughton. ''The remainder of the year will see marginal declines, however, solid yields will still prove popular with investors.''
An average two-bedroom apartment in Al Reef Downtown rents for Dh108,000, a reduction of Dh2,000 compared with the first quarter. A similar-sized property in Al Reem Island costs Dh140,000 per year. Al Bandar remains one of themost expensive locations with a two-bedroom apartment costing Dh193,000 per year, a minimal decrease of Dh2,000 compared with the first quarter.
The villa rental market also witnessed decreases across the board. Rental rates varied from Dh105,000-Dh145,000 for an entry-level, lower range three-bedroom villa and from Dh175,000 for four- and five-bedroom villas in the same category.
The rent for an average three-bedroom villa in Al Reef is now Dh148,000, in Khalifa City Dh183,000 and in Saadiyat Island Dh335,000.
Apartments and villas witnessed further falls in average sales prices, although there were only marginal drops of 1 per cent in the second quarter. The average sales price per square foot for apartments in the capital stood at Dh1,340 in the second quarter, with villas selling for Dh1,088.
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Source: Property Weekly