Apartment and Villa rental rates declined by 14% and 7% on an average over 2020. On a positive note, there was no change in villa rents in Q4 2020, with some popular communities recording marginal quarterly increases of 2% to 3%.
There has been an increase in demand for villas due to tenants upgrading to accommodate the work and study-from-home culture with the ongoing COVID restrictions. On the contrary, salary cuts and job uncertainty have also compelled residents to downsize homes in terms of size and location.
Further pressure on rental rates across residential properties is expected for the year 2021, until the economy improves and recovers. Tenant retention will become increasingly important and can be achieved through competitive rates, incentives and professional property management schemes.
The Abu Dhabi residential market came under pressure in 2020 with apartment and villa rental rates recording an average annual decline of 7%, with some properties noting a considerable drop of more than 15%. Incentives such as multiple cheques (up to 12 cheques) and rent-free periods have become the norm to attract tenancy occupation. Due to new and upcoming residential supply during a period of subdued market demand, will further result in the decline of rental rates in 2021.
Conversely, the impact of Covid-19 on villa rental rates were positive, with an increase in the demand for certain well-developed residential communities located on Yas Island, Saadiyat Island and in Al Raha Beach.
Information Credits: Asteco
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