Rents in Abu Dhabi will be under pressure in the first quarter 2017 due to economic uncertainties and redundancies due to shrinkage of the oil and gas sector, according to Chestertons.
The consultancy said on Sunday average apartment rents have fallen by seven percent in 2016, while villa rents fell 10 percent.
“We expect the pressure on rents to remain throughout the first quarter with the continuous cost cutting measures and job instability in the current market,” said Robin Teh, UAE country manager/director valuations and advisory UAE, Chestertons MENA.
In its Abu Dhabi residential market 2016 report, the consultancy said that tenants were seeking lower rental rates as housing allowances have been reduced.
Average apartment rents declined one percent in the fourth quarter 2016 from the previous quarter. Rentals in Al Reef Downtown fell by on average by 3 percent and 11 percent year-on-year, while rents in Al Bandar, Al Zeina and Al Reem Island fell by 8 percent, respectively.
Villa rentals declined 2 percent on average in the fourth quarter with villas in Al Reef, Al Raha Gardens and Saadiyat Island witnessing rental decreases of between 10 and 12 percent.
On the sales front, average apartment prices declined one percent in the fourth quarter, with Al Ghadeer and Al Reef Downtown falling at a double rate than market average. Al Ghadeer, Al Bandar and Al Muneera registered annual declines of 3 percent.
Villa sales prices fell 2 percent on average in the fourth quarter and 6 percent annually. Al Reef Island registered the highest annual decline of 6 percent, while Al Raha Gardens, Saadiyat Island and Khalifa City fell 4 percent, respectively.
Average yields remained stable for the past two quarters at above 5 percent, the consultancy said.