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Rents in Abu Dhabi still falling, but at slightly slower rate

Rents in Abu Dhabi fell by 6% in the third quarter of 2011 although the rate of decline slowed compared to previous quarters, the quarterly real estate monitor from Asteco shows. Rental values had fallen by 8% and 9% in the previous two quarters.

Villa rental rates were relatively static for the second consecutive quarter although villas in off island locations such as Mohamed Bin Zayed City and Khalifa City continued to slide by 5% on average.

In terms of sales, the market was still characterised by low sales volumes but the level of sales enquiries increased amid the delivery of completed projects.

‘The strong rental demand we are witnessing is being driven by existing residents' desire to upgrade and secure better value for money accommodation. This trend is set to continue as future improved quality accommodation is handed over in the coming months,’ said Elaine Jones, chief executive officer of Asteco Property Management.

To try and stimulate sales activity in the market, Aldar has announced a rent to own scheme on unsold properties at Al Zeina and Al Bandar.
‘Rent to own schemes are an effective way of stimulating demand. Similar initiatives have been successful in the past, such as the Green Community in Dubai,’ explained Jones.

The most significant new supply brought to market was the Al Zeina project at Raha Beach, which comprises 952 apartments, 26 penthouses, 119 townhouses and 124 villas.

Meanwhile, at Marina Square on Reem Island, despite receiving completion certificates for Zone A in March, uncertainty surrounds the handover dates to individual investors in Zones B, C and D.