Rental values in Abu Dhabi are predicted to fall by up to 30 percent over the next five months as supply is seen exceeding demand for the first time in five years, it was reported on Monday.
According to the city's biggest real estate agent, rents had already fallen by 10-30 percent with the supply of housing units exceeding demand, particularly at Mohammed bin Zayed City and Khalifa City A.
In comments published by Emirates Business, Abdul Rahman Al Shaibani, General Manager of Al Ghanem Real Estate, the largest agency in Abu Dhabi, said he expected rents to fall by as much as a third once new buildings, including the 14 towers at Al Reem Island, are handed over later this year.
"For the first time there is an excess of supply both inside and outside Abu Dhabi," he told the paper.
The comments come a day after Cluttons reported that prices for leasing residential property in Dubai have still not reached a bottom.
Cluttons' report into the Dubai property market during the first quarter of this year revealed that residential rents had dropped by an average of 5.5 percent during that period. Property sales were down by an average 2.9 percent.
The research note added that the glut of new homes coming online in Q2 would see rent prices dropping still further, and added that the appetite for off-plan development had showed no sign of returning.
Al Shaibani added: "Outside the city the supply is very large. At the moment we have many villas in need of tenants, but unfortunately we cannot find people willing to pay high rents."
He said villa rents had slumped from AED350,000 per year to as low as AED200,000 while two bed apartments had dropped from AED180,000 to AED130,000.
Al Shaibani said he expected rents would fall by 20 percent inside Abu Dhabi and more than 40 percent outside the city in the summer.