A recently released report by Landmark Advisory has forecasted further decline in house rents in Abu Dhabi during the first quarter of 2010. Abu Dhabi reported 15 per cent decline in rents during the fourth quarter 2009. Jesse Downs, Director of Research and Advisory Services at Landmark Advisory informed that rents in the low quality units hit more as compared to other units.

Downs said that changing equations of demand and supply are easing rents by giving more flexibility to the landlords. She further added, "We expect continued relocation from Abu Dhabi to Dubai, which will put further downward pressure on Abu Dhabi rents."

House prices in Abu Dhabi, however, are expected to remain stable during the first quarter without showing more fluctuations. The country reported substantial rise in sales volume in the quarter under consideration as compared to the third quarter. Average rents for villas and apartments declined 2.2 percent and 3 percent respectively.

Further, office rents in the capital are also likely to continue the falling trend, given to the clues of further increase in supply.