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‘No end in sight’ to Abu Dhabi residential rents decline
Wednesday, 21 April 2010

Consumers in Abu Dhabi can expect rental prices to continue to fall for at least the next three or four years, a local property expert has claimed.

“The market is dropping at the moment, and you can expect a continual but very soft decline,” regional director and head of Jones Lang LaSalle’s Abu Dhabi office David Dudley told Arabian Business during the Cityscape event.

“It’s only when you see a big block of supply coming onto the market that rents will start to fall a lot further, and we don’t see that happening for the next three to four years.”

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When asked whether he could foresee an end to the dropping rates, the executive said that there was still a lot of latent unsatisfied demand in the UAE capital, and a lot of households living in shared units.

“When more supply comes on stream, those two or three households will leave one unit and move into two or three units, so that new supply will get absorbed pretty quickly,” Dudley added.

While the ‘Dubai effect’ – workers living in the neighbouring emirate and commuting to Abu Dhabi – has been critical in the eyes of some analysts, Dudley argued that this factor doesn’t impact the whole rental market.

“There are other reasons for the commute than the rental price,” he explained. “The people more likely to commute are middle management, or foreign expats who don’t have families or children, and there’s also the availability of schools and facilities.

“It’s fair to say that although Abu Dhabi is doing a lot to improve its lifestyle offerings, Dubai has had a head start in that respect.”

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