Rent falls continue

Rent falls continue

New data shows downward trends continue.

July 28, 2010 2:20 by Samuel Potter

Rents in both Abu Dhabi and Dubai continued to fall in the second quarter of the year, according to new data.

Gulf News reports the findings of property consultants CB Richard Ellis, who found that residential lease rates showed minial movement over the quarter but have eased by as much as 33 percent over the same period in 2009.

The company said that areas such as Barsha, Bur Dubai, Shaikh Zayed Road, Marina, Greens and Jumeirah Lakes Towers saw rents ease as new supply came into the market. Apparently the highest drop in the freehold category has been in JLT and the Greens, which saw lease rates easing by 40 and 36 percent respectively. Among non-freehold locations, Barsha witnessed the biggest drop in lease rates with a decline for 44 percent from the market peak.

Meanwhile the latest figures from Jones Lang Lasalle say that prices in Abu Dhabi continued to fall in Q2. Average rents of a prime two bed apartment dropped 6 percent, with average rents of around AED 153,000. The year on year decline is around 16 percent.

“Forthcoming over–supply in the upper segment of the market is expected to result in a continued decline in average rentals,” said the JLL report. “Lower and mid-market segments will remain expensive relative to affordability due to an overall shortage of supply in these segments.”