Tasweek Real Estate Marketing and Development, a leading property advisor and solutions provider, reports that rates were subdued in the major markets of Abu Dhabi and Dubai in Q2 2012 as new supplies continued to trickle in.
This reflects Tasweek's earlier assessment that the markets could continue to be sluggish in the second half of the year. Tasweek adds that trends will be decided by the two factors of financial obligation and investment returns.
Since the start of 2012 Abu Dhabi has been witnessing a steady influx of available residential housing, especially in areas outside of the city proper. Rental prices have consequently been on the downslide, especially in Mohammed Bin Zayed City where Q2 residential rates fell by as much as 5%. Supply will continue to grow in the next few months with the completion of developments such as the rest of the Reem Island towers, the Corniche Road towers, mega-projects in the port area, and projects in the Abu Dhabi International Exhibition Center, among others.
Real estate companies are coming up with promotional offers and more building rental schemes especially geared towards residential tenants in anticipation of the foreseen sustained slide in sales and rentals.
Abu Dhabi's office market inside and outside of the metropolis continued its slight decline, slumping to Dhs1,200 per sqm per year on average. The rate for each sqm ranged from Dhs750 minimum to Dhs2,600 maximum.
Residential rates in Dubai continued to fluctuate between 2 and 3% in Q2. The prices of quality units in areas such as "Emirates Living" increased due to higher demand resulting from improved tenancy rates, rents and sales. Dubai Marina and Tecom have been stable since the last quarter, however. Locations such as Discovery Gardens and Silicon Oasis are still slumping due to the large supply of units and improvements on the living conditions of higher-quality areas.
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