Rents have fallen by 9.4 per cent across Abu Dhabi’s residential investment areas since the start of the year according to new research. The decline outpaced a fall of about 5.2 per cent in the value of homes over the same period, according to a report from Cluttons. It predicted further declines next year, with the top of the market being the hardest hit. Average house values in Abu Dhabi fell by 2.4 per cent in the three months to the end of September and are likely to fall again next year as cash-strapped companies lay off high-earning senior executives. The broker estimates that by the end of this year, villa values will have fallen by 10 per cent and apartment values will have fallen by 4 per cent.Sea view villas on Saadiyat Island had the greatest falls in value, with prices dropping by nearly 18 per cent over the first nine months of the year. Mid-range apartments on Reem Island had the second biggest falls in value with prices down by 11.1 per cent over the same period, Cluttons said. Cluttons forecasts that villa prices next year will fall again by another 7 per cent and apartment prices will fall by another 2 to 3 per cent. Cluttons estimates that average rents in Abu Dhabi fell by 1 per cent during the third quarter of the year and stand 9.4 per cent lower than at the start of the year. It said that the villa rental market had borne the brunt of the slowdown, with average villa rents falling 20 per cent in 2016. High-end villas also recorded the biggest falls in rents. Cluttons said that rents for villas on Saadiyat Island fell by nearly 25 per cent between January and September and were expected to fall further in the fourth quarter. “We have seen a notable acceleration in the residential market correction as a result of increasing global economic uncertainty and the protracted oil and gas sector’s decline, building during Q3 and being further exacerbated as we wait to understand the full impact of Mr Trump’s election as president of the United States of America,” said Faisal Durrani, the head of research for Cluttons. “This, combined with continued market softening across residential and office markets has led to nervousness among investors, with many reluctant to commit to purchases until they see signs of stabilisation.”But Cluttons said that rents in more affordable parts of the city increased as tenants continued to downsize and search for better value for money. Rents in Al Reef Downtown rose by 16.1 per cent during the first nine months of 2016.lbarnard@thenational.aeFollow The National’s Business section on Twitter
Source : thenational.ae
Read more…High-end villas lead fall in rents across Abu Dhabi, says Cluttons
