Average rental rates on the Corniche for one, two and three bedroom apartments are currently AED130,000, AED175,000 and AED220,000 respectively, down from their peaks of AED180,000, AED260,000 and AED350,000, Asteco said.
The Asteco report added that Abu Dhabi was continuing to see an increase in the supply of residential property with almost 1,000 new apartments delivered to the market in the last quarter, predominantly in off-island locations, including Mussafah, Mohammed Bin Zayed City and Khalifa City.
However, the Asteco Q3 2009 report on the Abu Dhabi property scene added that it may time a little time for landlords to adjust to the new market conditions.
"These apartments have initially been leasing slowly due to a mismatch between landlords' rental expectations and those of prospective tenants. This is only natural, discounting will be more prevalent when the market is faced with increased supply, including the ‘Dubai and Drive' option where the differential in rental prices is still hard to ignore," the report said.
Research conducted by Asteco also found that around 400 apartments will come online this month on Abu Dhabi Island, in addition to a continued supply of apartments coming up in Khalifa City A.
"Currently, commuters are attracted to Dubai by cheaper rents and a perception that Dubai represents better value for money, which is clearly visible from the volume of commuter traffic on the Abu Dhabi roads in the mornings and evenings," added Asteco CEO Elaine Jones.
"As better quality units are delivered in Abu Dhabi over the next six to 12 months, including Marina Square and Sun and Sky Towers, many daily commuters will consider these developments. It is clear, however, that this significant group of prospective tenants will benchmark these developments against comparable properties in Dubai - particularly in Dubai Marina."
The Asteco Q3 report also noted the change of approach among letting agents as the Abu Dhabi market evolved.
"Last year many brokers were charging viewing fees and most were not willing to entertain telephone enquiries from prospective tenants," the report said.
"This year, however, the majority of letting agents will offer to collect and drive prospective tenants to view numerous apartments on their books without charge, reflecting the fact that some apartments have remained vacant for a number of months."