Jul 01 2012
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Dubai studios cheaper to rent than Abu Dhabi's conversion apartments
Also: Most affordable areas to rent in Abu Dhabi
The only option, if commuting from Dubai is to be avoided, is to lease a conversion apartment in a villa for Dh24,000 to Dh36,000 per year.
However, there is clear indication yet whether Abu Dhabi Municipality will register these villa conversions as "individual" units.
Applications are being rejected if the condition is not met.
"There are very few areas where you could rent a studio for less than Dh20,000 pa.
"You would only be able to rent a conversion apartment in a villa," Drica Rodrigues, Head of Abu Dhabi residential sales and leasing, Cluttons, told Emirates 24|7.
Rents for conversion apartments range between Dh18,000 and Dh30,000 per year, depending on the location and size.
Rodrigues says rents have declined significantly with people having more options now, which includes handover of Nation Towers, St Regis Apartments with buildings in Zayed Sports City and Al Reem.
Although people do share villas, tough municipality regulations have led to fewer conversions these days.
"People are scared of dealing with investors and middle men. Many landlords are wary of converting own villas and getting stamped approval from the municipality."
Rodrigues suggests an agency similar to Dubai's Real Estate Regulatory Agency (Rera) might help make the market more professional and transparent.
Most affordable areas to rent in Abu Dhabi
The most affordable areas in the capital, Cluttons says, are still off-island such as Khalifa City A; Mohamed Bin Zayed; Baniyas, Al Bahia and older flats on the island.
Loshini Lawrence, Operations Manager, Abu Dhabi Office, Better Homes, agrees that rents have fallen in the capital, especially off the main island, with no studios currently are available for less than Dh20,000 per annum in the emirate.
"This is due to an increase in supply, both on the main island and surrounding communities such as Al Raha Beach, Al Reem Island and Khalifa City."
Depending on the type of property, two-bedroom villas can be rented at Dh80,000 pa within the Al Reef Development, which Better Homes says is located 25 minutes from the main island.
A one-bedroom apartment can be rented for Dh90,000 pa on Al Reem Island and studios priced at Dh65,000 per annum.
In March, Asteco, Dubai-based real estate consultancy, said release of new stock will further push rents down in Abu Dhabi, with apartment and villa rents falling five per cent.
Last year, Craig Plumb, Head of Research Mena, Jones Lang LaSalle (JLL), told this website that only a few developers in the capital had announced affordable housing projects, despite the Abu Dhabi Urban Planning Council directing at least 20 per cent of new residential property to be set aside for middle-income earners.
"It is indeed the government's policy, but to date, we have not seen many developers announcing projects that meet this criteria.
"This gets to the root of the problem with affordable housing - if you speak with the developers they will tell you they just cannot provide housing at the rentals stipulated by the Urban Planning Council and still make an acceptable economic return," he had said.
© Emirates 24|7 2012
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