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New supply to hit Abu Dhabi rents by 20% in 2010
Monday, 19 April 2010

Around 15,000 new units are expected to be completed in Abu Dhabi this year and the increase in supply will result in residential rental rates dropping by around 20 percent, according to new research by the Landmark Advisory consultancy firm.

“In Abu Dhabi, much of the new supply expected for delivery this year will rejuvenate a market that has a low average standard of quality for existing housing supply. About 5,000 of these residential units will be delivered in the Investments Zones, like Marina Square, and we expect most of the hand-overs to be concentrated in Q3 2010, which will result in a few key trends,” said Jesse Downs, director of research and advisory services at Landmark Advisory.

The quarterly report forecasts that the new supply will see sales and rental rates drop in 2010, with rental rates predicted to drop 20 percent by the end of the year. The sharpest decline in rents is expected in the second half of the year when the majority of units will come on stream.

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“Once these units are available in the leasing market and rents decline, relocation within the city will increase, and we predict that middle-high and high-income commuters will gradually start relocating back to the capital,” said Downs.

She also believes the new supply will have an impact in neighbouring Dubai as Abu Dhabi workers who previously lived in Dubai and commuted to the capital will now be able to afford to relocate to Abu Dhabi.


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