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Residential rents in Abu Dhabi increase amid calls for regulation of the property market

Rent prices fell during April and May by up to 15% and tenants and property agents had expected to see further falls this month and in July because thousands of residents were expected to leave Abu Dhabi because of rising living costs and job losses.

But instead there is also a shortage of rentals due to an influx of residents from Dubai and some international companies increasing accommodation allowances.

Also property owners are stubbornly refusing to drop their rents so tenants have little choice but to pay the going rate and are getting nowhere when they try to negotiate discounts.

Real estate professionals said rents were going up in cases where the management of residential buildings had been transferred from the government's Administration of Commercial Building to national owners or real estate companies.

'The majority of these owners have stopped renting their properties, leading to a reduction in supply and forcing tenants to take the remaining properties on the owners' terms and agree to higher rents,' said a spokesman.

But the industry does expect rents to fall in the long term. At the beginning of next year some 30 large residential towers are due for completion and this will inevitably force down prices, they claim.

'We expected a decline in June with the academic year ending and many families departing for good, but what happened was the total opposite. The power of the property owners is the main reason,' explained Khaled Mohammed Ibrahim, Executive Director of Al Bayan Real Estate.

Khalid Salah, President of Abu Dhabi-based Baynounah Real Estate, said large government owned companies were also responsible for increases. Oil companies, in particular Adnoc, had increased the accommodation allowances they paid their staff by 100%.

Now many would like to see some kind of regulation. There is concern about landlords paying tenants to vacate properties so that they can re-let them a much higher rents. Tenants can take complaints to the Judicial Conflicts Settlements Committee but settling a case can take a long time.

'The real estate market in Abu Dhabi badly needs to be regulated by law. It is neither acceptable nor logical to leave the market to owners who rent out property as they like and charge the prices they want,' said Salah.

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