Abu Dhabi renters opt for smaller units

High rental rates in Abu Dhabi are causing residents to downsize to smaller, more affordable units

Abu Dhabi rents cause residents to downsize to smaller units.
Abu Dhabi rents cause residents to downsize to smaller units.

Abu Dhabi residents are opting for smaller homes as rent pressures start to take a toll on larger residences in the UAE capital.

According to the latest report by real-estate agency Asteco, the Abu Dhabi Property Review cites a drop in rents for larger developments as residents opt for smaller, cheaper homes on the outskirts of the city.

In prime units, rental rates fell around 6% in the third quarter of 2016 compared to the same time last year, according to the report.

High-end units on the city’s Corniche area has also seen rates drop by 9% year-on-year, The National reported.

John Stevens, managing director at Asteco said: “The ongoing redundancies across various industry sectors and the reduction of staff housing allowances continues to negatively affect demand in Abu Dhabi, with a number of tenants opting to downsize and/or move to more affordable developments.”

But even employed residents are looking to downsize as high rents start to hit all segments across Abu Dhabi. 

As a result, the drop in rent, felt more prominently in neighbouring Dubai through 2015 and 2016, is now putting more pressure on landlords to lower rental rates in many of city’s prime areas.

The Atesco report said that the price difference for one- and two-bedroom apartments between Dubai and Abu Dhabi was typically almost $5,000 (AED20,000) per annum, but this has now narrowed to about $2,700 (AED10,000).

“The majority of vacant apartments, which were offered at reduced rates in Q2, have now been leased, especially the smaller unit types (studios, one- and two-bedroom units),” Stevens added.

He said, however, that rental rates for larger and more expensive three- and four-bedroom duplexes and town houses have fallen by 10% since the last quarter, with a high percentage remaining vacant for over six months.


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