DUBAI // Rents fell in Abu Dhabi but rose in Dubai last year, according to property website Dubizzle.

Figures were compiled from listings on the popular classifieds site.

Rents in the capital dropped by up to 18 per cent in some neighbourhoods last year, statistics show, but Dubai saw increased prices of up to 61 per cent in some areas.

Analysts had predicted the capital would see a rise in rents following last year's announcement that all Abu Dhabi government employees must live in the emirate by the end of this year or lose their housing allowance. This in turn was expected to slow demand in Dubai.

But Matthew Green, head of research at the Dubai office of consultancy CB Richard Ellis, said it was too early to demonstrate that through statistics, although it may eventually be the case.

"The announcement only came into effect part-way through the year and there's always going to be a time lag before you notice the effect," he said.

"It's only noticeable when people come to renew their leases. You're already starting to see it now.

"A lot of companies and developers we are working with in Abu Dhabi say they have been seeing a noticeable difference. That doesn't mean you'll see rental growth straight away because there's a significant volume of new units that are being delivered at the same time.

"[The decree is] quite a timely interception by the government and will ultimately help increase demand. But it's just going to take a year before we see the full impact of it."

Dubizzle compared the rents of one-bedroom apartments and villas in certain areas from January to December last year.

More than 30,000 property adverts in Dubai and 4,000 in Abu Dhabi were calculated to get a monthly average.

"Our data comes from more than 500 rental agencies that are signed up on Dubizzle," said a spokesman. "It is therefore quite representative of the supply and demand in the market and gives a reliable indication of the health of the industry."

The information tallies with what real-estate analysts have seen from the market.

Craig Plumb, head of research for the region at Jones Lang LaSalle, said the company had noted an average increase of about 20 per cent in Dubai's rental market.

But the government's decree, coupled with new stock of about 20,000 units due to enter Dubai's market this year, could stall further growth.

"We probably will see rents continuing to grow this year but this will probably just slow the growth," he said.

He believes it is unlikely that Dubai's rental market will ever return to 2008's peak, when a one-bedroom apartment could cost more than Dh120,000 a year, payable in one cheque only. "That was unsustainable and it was making Dubai a harder place for companies to employee people," he said. "We're not expecting rents to go back up to the level they were then.

"We'll still see some growth but it will be in single digits rather than double digits."

mcroucher@thenational.ae

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