The prices of the houses for rent 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.
The prices of villas for rent in Abu Dhabi fell by 10 per cent during 2016 while the prices of the apartments for rent in Abu Dhabi fell by an average of 7 per cent.
During the final three months of 2016, the broker said that apartment rents fell 1 per cent compared with the previous quarter while villa rents were down by an average of 2 per cent.
According to specialists, rents fell in all of the freehold areas in Abu Dhabi during the final three months of 2016 apart from Aldar’s low-cost Al Ghadeer development on the border with Dubai.
Apartment rents in Al Reef Downtown were subject to the biggest falls, slipping by an average of 3 per cent between the end of September and December 2016 and by 11 per cent during the year. Apartment rents in Al Raha Beach and Reem Island fell by an average of 8 per cent during the year.
Villa rents in Al Reef, Al Raha Gardens and Saadiyat Island all fell significantly during 2016, dipping by between 10 per cent and 12 per cent on average.
Sales prices were also hit by the oil price downturn and job losses across the city. Prices for villas in the capital dropped by an average of 6 per cent during 2016 while apartment prices fell by 3 per cent.
During the final three months of 2016, Chestertons calculated that apartment prices fell by 1 per cent and villa prices were down 2 per cent.
The pressure on rents it is expected to remain throughout the first quarter of 2017 with the continuous cost-cutting measures and job instability in the current market. Redundancies and contract oil and gas sector continues to put pressure on market demand. Tenants looking for lower rental rates as housing allowances were reduced.
Last month, some brokers predicted that house prices and rents will continue to decline at similar levels to last year.
They calculated the values for prime and mid-prime villas fell by 15 per cent during 2016, while apartment values were down 7 per cent.
The price and rent falls would be particularly marked on Reem Island, where another 2,400 homes are expected to come to the market this year as towers including Marina 1&2, Sigma 1&2, Al Shams Tower and M Tower. All are due to be delivered this year.