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Dubai apartment rents plummeting compared with neighbouring Abu Dhabi, report shows

Three bedroom properties suffered the most with prices falling 13% between July and September, says the report by property services company Asteco.
 
Average prices for the largest apartments fell to AED139,000 compared to AED173,000 in Abu Dhabi for the same type of property. The rent fell by just 1% in the same period in the UAE capital.

Dubai also saw the largest drop in rent for two bedroom apartments with values down 8% to AED103,000 while the same apartments in Abu Dhabi were a third more expensive at AED137,000.

One bedroom apartments in Dubai dropped by 4% to an average of AED76,000, while the average for the same property in Abu Dhabi was AED28,000 more.

The only type of apartment that didn't experience a fall in rent in Dubai between July and December was studios where rents held firm at an average of AED45,000.

The prices are attracting more buyers from Abu Dhabi who are then commuting to work.

‘The attractiveness of cheaper rents and better value for money in Dubai is clearly visible from the volume of commuter traffic on the Abu Dhabi roads in the mornings and evening,’ Asteco said in its report.
 
But the report warns that an influx of new properties coming onto the market in Abu Dhabi could result in rent levels dropping. Almost 1,000 new apartments are due to be delivered to the market in the last quarter of this year, predominantly in off-island locations, including Mussafah, Mohammed Bin Zayed City and Khalifa City.

‘As better quality units are delivered in Abu Dhabi over the next six to 12 months, including Marina Square and Sun and Sky Towers, many daily commuters will consider these developments.

It is clear, however, that this significant group of prospective tenants will benchmark these developments against comparable properties in Dubai, particularly in Dubai Marina,’ the report concludes.

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