Thursday, Jul 14, 2011
Gulf News
Dubai Thousands of professionals enduring the daily commute from Dubai to Abu Dhabi are considering a permanent move to the capital this summer as rents continue to fall, according to a new report by the property consultancy Cluttons.
Residential rents in Abu Dhabi dropped five to 10 per cent in the second quarter of 2011 against the first three months of the year with some high-end apartments now almost at parity with accommodation in Dubai’s most popular areas such as the Palm Jumeirah and Dubai Marina, the report said.
Job losses
The number of people commuting to Abu Dhabi has grown significantly since Dubai’s real estate market eased during the height of the global financial crisis in 2008 leading to the loss of thousands of jobs in the city’s construction and property sectors.
Many residents found new jobs or were seconded to Abu Dhabi but opted to remain in Dubai and undertake the daily commute to the capital, a round trip of approximately 250 kilometres.
Furthermore, some Abu Dhabi residents chose to move in the opposite direction to new developments such as Jumeirah Lakes Towers and Discovery Gardens in order to take advantage of cheaper apartment blocks with greater amenities.
“A huge amount of stock is scheduled to come online in Abu Dhabi over the next 12 months and rents there are falling on a daily basis,” said Richard Paul, Associate Director at Cluttons. “In terms of quality of finish, apartments in Abu Dhabi are very similar to those in Dubai. Al Raha Beach is proving particularly popular for those who want to live an equal distance between the Abu Dhabi Corniche and the outskirts of Dubai,” he added.
Paul says a lot of leases tend to come up for renewal in late September and early October, which is when some professionals working in Abu Dhabi will decide to relocate to the capital on a permanent basis.
“Dubai still has a greater choice of amenities but many residents feel that is counterbalanced by the daily commute, which most people hate,” Paul added.
Outstripping demand
A number of property consultants — including Jones Lang LaSalle, Asteco and CBRE Middle East — have issued reports over the last week. The falling cost of renting or buying an apartment in Abu Dhabi has emerged as one of the key conclusions as supply continues to outstrip demand.
According to Cluttons, a one-bedroom apartment in Mohammad Bin Zayed City and Khalifa City A and B costs around Dh45,000 per annum with properties in northern areas of the island — such as Tourist Club Area and Al Markaziyah — available for rent at about Dh100,000 per annum, down 4.5 per cent from first quarter 2011.
By Kevin Scott?Staff Reporter
Gulf News 2011. All rights reserved.
