Mixed news for Abu Dhabi housing market

Abu Dhabi rents have continued to slide amidst weak employment figures and a softening economy, a new report says.

Average market rentals fell by around 2 percent between the second and third quarters, taking the year-on-year decline to 5 percent, according to the Q3 2016 Abu Dhabi MarketView by global real estate consultancy firm CBRE.

Luxury residences within master planned communities, which are highly favoured by blue chip corporate tenants and high-income expatriate residents, have experienced an average rental drop of 3-5% over the last quarter. This has translated into declining rentals for larger unit types, but solid fundamentals for smaller and more affordable units.

“Despite the drop in overall rents, more affordable community housing products have still managed to demonstrate modest rental growth, or have remained flat. This underlines a general market shift towards cost sensitivity,” the report said.

“With expatriate residents most susceptible to deflationary risks and company downsizing, we anticipate further migration of tenants to locations such as Al Reef Downtown, and affordable mainland locations.”