More Expats buying in Abu Dhabi for rental market

mar bonnin palmer

Developments in Abu Dhabi's rental sector look likely to mean a two tier system could soon be in operation, according to analysts.

New stock entering the supply chain means that older properties are becoming less desirable and it is expected that this will have a knock-on effect for rental yields.

Current estimates are that 15,000 new homes have entered the domestic Abu Dhabi market during the last year and more than 17,000 additional units are due to be completed in 2013.

This classic example of supply and demand meant that mean rental levels fell by an average of 12% during 2012.

Of course all areas have not been affected equally, with the upheavals mainly centred on the locations where the majority of the new constructions are taking place.

Reem Island is expected to have 5,900 new units come on the market in 2013, mainly comprising of developments in the Gate District and standalone towers on Shams Abu Dhabi.

The popularity of the new build projects means that they are likely to be able to command high rental rates, due to their improved standards of quality and contemporary facilitates.

Older property stock is already seeing occupancy levels fall and rents accordingly tumble as landlords seek to keep hold of existing tenants.

Official announcements are also impacting on the situation, as recent changes mean that government employees will be required to live in Abu Dhabi to qualify for housing allowances, which is another aspect adding to the increased demand for high end stock.

The new Nation Towers development is expected to become one of the most sought-after addresses in the city and exemplifies the trend in rental movements as both domestic and international investors look to the future.

Property investments in foreign countries can be a great way to make money work for you, but always use a specialist currency exchange firm when transferring money abroad.

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Abu Dhabi rental market looks likely to split

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