Following the trend seen across the UAE, Al Ain too is experiencing an increase in demand for real estate, according to leading property consultants Asteco.
Year on year figures released by the company have revealed a significant rise in the cost of renting villas with the rents of old three-bedroom villas increasing by almost 30% from the corresponding period last year and new five-bedroom villas rising by more than 40%.
Brett Whalley, Head of Sales and Leasing for the UAE at Asteco, believes that the current boom in rental prices in the UAE's fourth largest city is due to a combination of factors - new industries setting up and an influx of expatriates relocating to Al Ain.
"Several new companies have recently opened offices in Al Ain, particularly those with interests in consultation and construction. The need to house new employees has inevitably increased the demand for property," said Whalley. "In addition, expatriates working in Abu Dhabi and Dubai are taking advantage of the more affordable accommodation in Al Ain, despite the longer commute."
"The cost of renting in Al Ain may be rising, but it is still much cheaper than in Dubai and Abu Dhabi and those prepared to accept a longer drive to and from work can expect to save around 50 to 60% of their housing allowance," he added.
The rental market in Al Ain is divided into 'old' and 'new' villas with very few apartment buildings within the city. The difference between new and old villas is not only the age of the villa, but location, amenities and facilities, which play a major role in determining its value.
Current prices for old three, four and five-bedroom villas in Al Ain average around AED45,000, AED60,000 and AED70,000 while rental rates for new villas are at AED60,000, AED75,000 and AED85,000, marking approximately a 35-40% increase from previous property rates.
Average prevailing office rental rates are between AED500-600 per square metre in Khalifa Street; AED600-700 per square metre in Aud Al Touba and AED600-750 per m² at Senaya Street. With supply falling short of demand, prices will continue to rise in the medium term, according to Asteco.
Pressure on housing in Al Ain may soon be relieved with a number of new construction projects coming on board. The Ain Al Emarat, launched by Al Qudra, is one such development.
When completed, Ain Al Emarat will have villas, sport water canals, spas, a golf course and a premium shopping and leisure mall. There will also be three-, four- and five-star hotels, medical facilities, schools and a number of sports grounds. Noor Al Ain is another similar project by Aldar which is also on the cards.
"The Ain Al Emarat and Noor Al Ain developments are a reflection on how Al Ain is positioning itself next to the established metropolises of Abu Dhabi and Dubai," says Whalley. "Both Abu Dhabi and Dubai are around 150 km away and these days that sort of a distance is not unreasonable for commuting."
Founded in Dubai in 1985, Asteco is the UAE's largest property services company. Its services include retail, commercial and residential sales and leasing; strategic consultancy; property management and marketing; feasibility studies and valuations; and research and investment.
Source: Property World Middle East