Abu Dhabi has announced plans to provide more accommodation options for lower income groups in the capital as the property market continues to weather tough economic conditions.
The Department of Municipal Affairs and Transport at the Abu Dhabi City Municipality (ADM) are encouraging investors to construct new buildings or convert existing properties to provide units targeting two categories of occupants.
The first is those earning Dhs4,000 to Dhs6,000 a month, for whom the monthly rent would range from Dhs1,400 to Dhs2,100 per month.
The second is bachelors earning Dhs2,000 to Dhs4,000 with rents ranging from Dhs700 to Dhs1,400.
Government officials forecast the new unit types would offer a return on investment of between 21 and 28 per cent a year to developers, save Dhs4m in total building costs and reduce construction periods by up to eight months, during a workshop to highlight the initiative.
“This initiative aims to provide proper and legal options of residential units befitting the financial means of low-income individuals and at the same time open an investment opportunity to owners of commercial properties in Abu Dhabi,” said Musabbah Mubarak Al Murar, acting general manager of the ADM.
In order to be applicable, buildings must overlook the main road, not have residential units on the ground floor and meet room size requirements.
These range from 26 square metres for a studio, 40 square metres for a one-bed, 60 square metres for a two-bed and 80 square metres for a three-bed.
Priority for this accommodation will be given to those working in entities and commercial organisations within the same sector and units will not be able to be rented by individuals directly.
A Q2 report by property consultancy Asteco found that residential apartment and villa sales prices in Abu Dhabi were down 8 per cent and 4 per cent respectively year-on-year, and 4 per cent and 2 per cent respectively on a quarter-on-quarter basis.
Prime, high and low-end property rents were also down 3 per cent quarter-on-quarter as the market continues to suffer from a lack of demand following redundancies in oil and gas and other sectors.