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Renting surge in Abu Dhabi's upscale areas as residency deadline looms

The number of new tenants taking out leases in Abu Dhabi’s glitziest neighbourhoods has increased by up to a fifth as government workers relocate to the capital ahead of the housing allowance decree deadline.

Property brokers are reporting a surge in leasing activity in new masterplanned areas as government employees move their families to the emirate in time for the September 1 deadline to live in Abu Dhabi or face losing their housing allowance. Estate agents report leasing activity in the city as a whole is up by between 10 per cent and 20 per cent due to the influx of government employees hunting for properties.

“We have probably seen an increase of 20 per cent in leasing activity compared with the same period last year,” said Andrea Menown, the head of leasing at LLJ Property. “We have definitely seen a big increase in the number of families looking to rent in the city within the government housing allowance price brackets.”

Another property broker Cluttons also reported a significant rise in leasing activity due to the influx of workers who live or have been residing in Dubai but work in the capital.

“We have seen perhaps 10 or 15 per cent more tenants taking leases this year compared with summer 2012,” said Drica Rodrigues, the residential leasing manager at Cluttons’ Abu Dhabi office.

“It’s a trend we have been noticing for the past six months or so. However, we don’t think all of this is down to the decree,” she said. “We have also seen an increase in the number of teachers looking for accommodation due to [new] school openings.” In its latest quarterly statistics on the Abu Dhabi market published yesterday, CBRE also reported increased tenant activity in the housing market.

“We’re probably looking at an increase in leasing activity of 10 and 15 per cent,” said Matthew Green, the company’s Dubai-based head of research. “However, this has been concentrated in the new masterplanned areas of the city while the older areas have seen very little activity.”

According to CBRE, after years of falling rental prices, average rents in Abu Dhabi are set to start to rise by the end of the year due to the influx.

Opinion among property brokers in the cpaital is divided over what is happening to average rents as rents in older apartments in the city centre continue to fall while those in newer blocks are rising.

CBRE reported average rents in  Abu Dhabi dropped a further 4 per cent during the three months to the end of June making them now 10 per cent lower than they were a year ago. But it added that, despite an expected glut of 5,000 new flats coming to the market over the coming months, it expected to see average rents showing an increase before the end of this year.

“The market in Abu Dhabi is becoming increasingly fragmented,” Mr Green said.

“We’ve seen that rents in newer stock have gone up by around 15 per cent over the last six months alone,” said LLJ’s Ms Menown. “Rents for one-bedroom flats in Tala Tower on Reem Island started at Dh75,000 and are now at around Dh90,000 a year.”

Abu Dhabi brokers also said they were receiving more inquiries from house hunters wanting to buy property in the city.
LLJ reported an increase of more than 20 per cent in the number of prospective buyers it was showing around flats over the past year, albeit from a small base.

“This could be something to do with the decree but we suspect it is just a function of more newly built flats coming to the market,” said Ms Menown.

“A year ago there really wasn’t much stock on the market which anyone in Abu Dhabi could buy. Over the past few months a few more developments have come online such as Rihan Heights and Tala Tower.”



Read more: http://www.thenational.ae/business/industry-insights/property/renting-surge-in-abu-dhabis-upscale-areas-as-residency-deadline-looms#ixzz2cUic0wEC

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