Abu Dhabi is seeing a rise in demand for rental properties in the run-up to a deadline for the emirate’s government staff to move to the UAE capital or else forego their housing benefits.

The Abu Dhabi Executive Council announced in September 2012 that all government staff currently residing in other parts of the UAE must move to Abu Dhabi within a year, or lose their housing allowances.

The official reason the council gave for making the decision was to ensure the safety of employees commuting long distances and boost employee performance by restricting the amount of time spent travelling.

But the regulation also appeared to be targeting expatriate workers who have opted to live in neighbouring Dubai due to its cheaper rents, with the aim of propping up the capital’s rental market, which has suffered from oversupply in recent years.

The potential influx of new tenants is significant, as government statistics estimate the number of employees and their families who live outside the emirate at 23,000.

However, despite a noticeable rise in leasing activity during the first half of 2013, average rents continue to drop in the emirate, according to a new report by the US’ CBRE. The property consultancy said rents fell by 4 per cent during the second quarter of the year and are down by about 10 per cent compared with the same period last year.

The highest demand is currently for two-bedroom units, with rentals for upper, middle, and high-end accommodation ranging between $24,500-39,500 a year.

Due to a pick-up in the delivery of new projects, there has also been an increasing amount of movement of people within the emirate as more units are delivered to the market.

“The completion of a significant number of new residential units from masterplanned locations is also encouraging widespread relocation within the capital, as tenants look to capitalise on prevailing affordability in their search for new and better-quality housing options,” says Mathew Green, head of research and consultancy for the UAE at CBRE Middle East.

“Newly delivered residential developments such as Marasy Abu Dhabi and Nation Towers are commanding relatively high rental rates due to their superior quality finishes, waterfront views and wide-ranging facility and amenity offers. This trend reflects sustained demand for true high-end residential properties that offer tenants a real point of difference against the existing inventory.”