Rental rates around the capital continued to slide even before the summer months as demand dwindled, according to the latest study.
A recent report on real estate trends by Property Finder website revealed a significant drop in rental prices during the first quarter of the year compared to the last quarter of 2016. The declines included popular locations such as Al Reef Island (8.4 percent down), Al Reem Island (8.1 percent down), Al Ghadeer (7.1 percent down) and the Corniche area (5.2 percent down).
Villa rents fell across all market segments from Al Reef (10.9 percent down) and Hydra Village (5.3 percent down) to Khalifa City (eight percent down), Al Salam Street
(three percent down) and Saadiyat Island (8.5 percent down).
The decreases are attributed to the economic slowdown as the government cuts back on spending to manage sluggish oil prices in the global market. This has resulted in job losses in various industries, which has had a knock-on effect on housing demand.
“We broadly agree with the reasons for the fall, but would also add into the mix the increase in supply in areas like Reem Island, which have seen the sharpest drops. Saadiyat and Raha Beach haven’t seen much or any delivery of new units and have held up quite well,” Ben Crompton, managing partner at Crompton Partners Estate Agents, told Abu Dhabi World.
With more options and bargaining power, now is certainly the right time for residents who are looking to move and capitalise on the cheaper prices.
“Tenants should be keeping an eye on the rents in their building and locality and approaching landlords for rent reductions where appropriate,” added Ben.
“In some circumstances, tenants can now afford to upgrade to bigger newer units, more bedrooms or from apartments to villas – and this is a good time to do that.”
He continued: “The best deals are where the rent has fallen the most, so Reem Island and the Corniche. Rents in Gate Towers, for example, have come down a huge amount to the extent that three-bedroom apartments are now leasing for AED 150,000.”
As for his projection on whether he sees rental prices picking up anytime soon, Ben said: “I would expect to see rents bottoming out towards the end of the year.
“A lot of people arrive in the summer for the start of the school year and we aren’t looking at having too much delivered before 2018.
“I would expect a slow start to 2018 and rents to have fully stabilised by the middle of