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Unlike Dubai which is witnessing a decline in rental and sales prices of villas and apartments in the second quarter of 2015, Abu Dhabi has seen a steady jump in the rates of properties all across the board.
On average, the rental rates of properties in Abu Dhabi are currently 15 per cent higher than those in Dubai, while prime properties in the capital are around 20 per cent costlier than those in Dubai. The price gulf may prompt a number of residents currently working in Abu Dhabi to shift their residential bases to either Dubai or Al Ain. This trend was increasingly seen between 2009 and 2011.
According to Asteco’s recent survey of the real estate trends in Q2 2015, rental rates for apartments increased by 6 per cent on average in the last three months. Rentals of high-end developments like Eastern Mangroves, Saadiyat Beach Residences and Al Rayyana have also been moving northwards with lease rates seeing a year-on-year increase of around 17-18 per cent. Experts say the steep hike is attributed to the rising demand for prime quality residential developments and the dearth of new stock entering the market in this segment. Most of these developments have zero vacancy and there is a long waiting list of potential tenants. The only residential area in Abu Dhabi where rentals have remained static is the Corniche as the properties in this location were already fetching a premium.
In the villa segment, rentals in most areas seemed to have stabilised after showing sharp increase in the last six months. However, the lack of new stock in the market until 2017 is expected to prompt a spurt in demand, leading to increase in rents in the next few months. Villa clusters which showed a steep climb in rentals included Al Raha Gardens, recording eight per cent increase in rental rates since Q2 2014, whereas Hydra Village posted a six per cent rise. The annual rent of a three-bedroom villa at Al Raha Gardens is around Dh165,000 to Dh220,000, while the rent of a three-bedroom villa at Hydra Village is Dh90,000 to Dh115,000.
* Corniche is the only area in Abu Dhabi whose rents have remained stable
* Eastern Mangroves, Saadiyat Beach Residences see up to 18% rental hike
* Villa rental rates expected to increase in a few months due to high demand
Source: S. Dhar, Special to Properties
The writer is a freelancer