Villa rental rates recorded a marginal drop of 2% and apartment rates recorded a drop of 4% over Q3 2020. Further rental declines are anticipated in the next 6-9 months with rental drops slowing down only in Q2 of 2021.
Tenant movement has increased significantly over the last quarter. Several residents are downsizing their accommodations as they repatriate their families due to salary cuts and as a precautionary measure in the current scenario.
Conversely, many tenants are seeking to upgrade to larger apartments/villas that have an office space, usable outdoor space (balconies, terraces, gardens), additional storage space, community amenities with access to retail and leisure facilities.
Apartment rental rates recorded a marginal quarterly drop of 3 %. However, buildings in the lower end of the market recorded a significant drop of 10%. Villa rents were relatively stable with annual declines of 7%. There was an increase in demand for villas in well-developed communities of Yas Island, Al Raha Beach and Saadiyat Island.
Many tenants had to downsize their accommodations due to job losses, salary cuts and reductions in housing allowances. These fluctuations continue to pressure the real estate market in Abu Dhabi. Landlords continue to offer discounts in rents to secure high occupancy levels including rent free periods (up to 2 months), multiple payments (up to 12 cheques) and waved commission fees
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Information Credits: Asteco