Abu Dhabi rentals fell slightly in first quarter of 2009

High supply coupled with low demand led to marginal drop of residential rentals in Abu Dhabi in the last quarter of 2009.

According to a quarterly report released by the largest property services company in the UAE Asteco, the slight increase in vacancy levels and the additional supply of residential property in Abu Dhabi led to ‘softening of the market.’

“The rental market has shown signs of softening, striking more of a balance between the negotiating power of tenants and landlords,” Asteco Chief Executive Officer Elaine Jones said.

In Dubai, rental remained stable in the last quarter but premium apartments are around 20 per cent cheaper than in Abu Dhabi.

“The growing availability of units and a revival in market activity after a traditional slow summer period have resulted in a minor downward fluctuation in the cost of renting in Abu Dhabi,” added Jones.

New apartments in Abu Dhabi

According to Asteco, 2,000 new apartments are due to be ready for release in Abu Dhabi in the first half of 2010 and another 2,000 in the second half of this year. Also, nearly 7,800 apartments will be ready on nearby islands by the middle and end of this year.

“One trend that we have noted is that the number of people working in Abu Dhabi but continuing to live or moving out to Dubai remains significant,” said Jones.

“This trend is not expected to change in the short term without the perceived value for money versus location issues being addressed,” she added.

The Asteco reported indicated that during the last quarter, villa rents on the main Abu Dhabi Island declined between 10 to 20 per cent with an increasing number of landlords willing to accept reduced rents to secure tenants quickly.

Committee to settle disputes

Elsewhere, in Ajman, a new committee to settle disputes between developers and investors has been formed. The committee will take up issues pertaining to cheques involved in real estate transactions.

The Director General of Ajman Real Estate Reugulatory Authority (ARRA) Omar Al Barguthi said the committee was hoped to begin operations by end of 2009, but the clearance from the Ministry of Justice is awaited.

Apart from resolving investor-developer disputes, the committee will also take up issues pertaining to post-dated cheque issues and more such cases pertaining to property sector, he added.

The committee will include five members nominated by the Executive Council, headed by a Judge assigned by the Ministry of Justice.

In November, the Dubai Government established a new judicial committee to deal with cases of bounced cheque in property sector.

ARRA is working with Ruler's Court of Ajman based on a decree to establish a 'bounced cheque committee'. The decree is hoped to be passed within next two months, said Lisa Dale, Partner and Head of Property Department, Al Tamimi & Company.

This follows the initiative by Dubai, wherein a similar committee was established on the directions of Dubai's Ruler.