Abu Dhabi’s rents: up or down?
Property consultancy firm Asteco released a report on rents in Abu Dhabi. The UAE’s newspapers have varying takes on the findings.
April 14, 2009 1:08 by Aarti Nagraj
Dubai-based property consultants Asteco released a report titled Abu Dhabi Report for Q1 2009 on Monday. Most of the local news outlets have published articles about the report, but have interpreted the information in the report differently. Kipp checked out the story in two English-language UAE dailies.
Credit crunch takes steam out of Abu Dhabi rental market reads a headline in The National. The article claims that according to Asteco’s report, residential rents in the capital have fallen by up to 20 percent in the first quarter of 2009 despite a shortage of accommodation.
“This is the first time we have seen a drop in rental levels since the start of the credit crunch and while the drops are not positive it was not as bad as we expected,” Asteco’s managing director, Andrew Chambers told the paper. He added that the drop was inevitable because of the incredibly high rental levels at the end of the previous quarter.
“Towards the end of last year we saw many people who work in Abu Dhabi simply unable to afford to rent here, so they relocated to Dubai and commuted every day,” he explained. “Now with these reductions in rental levels, prices have come back within people’s budgets and are now much more affordable.”
The report also says that expatriate landlords have cut the rents by a larger margin that the local ones. ”The expat landlords are more cash-strapped and reliant on salaries and rental incomes, compared to local investors who don’t have the urgent need for money from their tenants,” Chambers said.
Conversely, an article in Gulf News on the same report read Rents in Abu Dhabi stay strong. “Rental rates in Abu Dhabi remain strong and are forecast to continue that way this year, despite the global financial crisis depressing rents in other GCC markets”, reads the first line of the Gulf News article.
It says that according to the report, both residential and commercial rents have dropped only slightly in the first quarter of this year “in line with capital values”. It also states that the reduction in accommodation allowances has had an impact on the tenants’ rental options.
The seventh paragraph of the article says that “as in Dubai, local investors are unwilling to lower their prices on vacant units, however, expatriate owners have reduced their apartment rents by as much as 20 percent.”