Rents for apartments in Abu Dhabi have dropped by an average of -5-15% during Q1 2010 and are expected to continue to fall, according to property company Asteco.

There are also significant quantities of new supply under construction, with a substantial quantity of the new stock due to be completed over the next three to six months on Al Reem Island. Asteco estimates that as many as 15,000 apartments will be delivered to the market by the end of 2010, with over 9,000 of these units being built specifically to lease.

Elaine Jones, CEO of Asteco Property Management, said: “This year will be a ground-breaking year for the Abu Dhabi real estate market with the first phases of ‘Investment Area’ stock being delivered. This new ‘freehold’ supply, along with many sizeable build to lease projects on and off the main island, will bring a significant quantity of new supply, with a total close to 20,000 new homes by the end of the year. This will bring movement to the market and, for the first time in Abu Dhabi, some truly high-end residential developments.”

One bedroom apartment rents fell by -5% with sale prices falling by -4%, whilst both two and three-bed rents fell by -15% and their sale prices decreased by -7%. Two bedroom villas’ rents dropped by -10%, as three-beds dropped -5%, four-beds -15% and five-beds by -20%. Sale prices fell -4% across all villas.