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UAE Property sales and rentals slated to keep falling
| Published: | 25 Jul at 6 PM |
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In spite of an anticipated stimulus, Abu Dhabi residential prices are expected to fall further over the next 12 months.
Abu Dhabi real estate investors and landlords expecting a swift response after the crown prince’s stimulus package are about to be disappointed, according to professionals in the sector. Leading real estate agents are stating the major effects of the reforms will concentrate on developers as well as on the promotion of public and private entity partnerships. In addition, companies operating within the city’s free zones will benefit by the introduction of dual licenses allowing them to bid for government contracts. Private landlords and investors, it seems, will have to be patient for a while.
A recent report focused on changes in visa rules as well as the decision to permit foreign companies to own 100 per cent of their businesses, saying the changes would have a positive effect on the property market as a whole as they gave expats more security as regards their rights to remain. However, the report also warned a fast improvement in the residential real estate market, in a tailspin for some three years, was unlikely. Apartment prices for both sales and rentals have dropped by nine per cent year on year, prices of villas have fallen by 19 per cent and further falls are predicted.
In June, Abu Dhabi’s crown prince announced the upcoming launch of a massive 50 billion dirham three-year stimulus package, with the emirate’s executive council instructed to decide the best way to distribute the funds. Company investment as well as employee numbers have dropped along with levels of infrastructure investment, leading to a fall in jobs and less demand for office space and homes. However, discussions on cutting land costs could eventually result in a pick-up for the emirate’s real estate market. Real estate experts are expecting the stimulus package will begin to show benefits by the end of this year, but at present supply is far exceeding demand and new developments are about to come onto the market as prices continue to fall.
Abu Dhabi real estate investors and landlords expecting a swift response after the crown prince’s stimulus package are about to be disappointed, according to professionals in the sector. Leading real estate agents are stating the major effects of the reforms will concentrate on developers as well as on the promotion of public and private entity partnerships. In addition, companies operating within the city’s free zones will benefit by the introduction of dual licenses allowing them to bid for government contracts. Private landlords and investors, it seems, will have to be patient for a while.
A recent report focused on changes in visa rules as well as the decision to permit foreign companies to own 100 per cent of their businesses, saying the changes would have a positive effect on the property market as a whole as they gave expats more security as regards their rights to remain. However, the report also warned a fast improvement in the residential real estate market, in a tailspin for some three years, was unlikely. Apartment prices for both sales and rentals have dropped by nine per cent year on year, prices of villas have fallen by 19 per cent and further falls are predicted.
In June, Abu Dhabi’s crown prince announced the upcoming launch of a massive 50 billion dirham three-year stimulus package, with the emirate’s executive council instructed to decide the best way to distribute the funds. Company investment as well as employee numbers have dropped along with levels of infrastructure investment, leading to a fall in jobs and less demand for office space and homes. However, discussions on cutting land costs could eventually result in a pick-up for the emirate’s real estate market. Real estate experts are expecting the stimulus package will begin to show benefits by the end of this year, but at present supply is far exceeding demand and new developments are about to come onto the market as prices continue to fall.
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