Property market update - Abu Dhabi

In hindsight the Cityscape Abu Dhabi show did not have a great consequence on the Abu Dhabi real estate market. At this point the freehold market of this area is fairly inactive with a small number of transaction occurring.  There are a lot of requests about houses in Al Reem Island and Al Reef Downtown, but hardly any transactions were completed because banks’ assessments are far below the negotiated costs forcing buyers to halt as soaring down-payments are required. Plunging freehold prices remain throughout Abu Dhabi, as several developments are on offer at their original costs in the secondary market. We conclude that prices will keep on descending as the summer months persist. It is however anticipated that this decrease will slow down in comparison to the first three months of this year.  Additionally, prices are expected to eventually even out completely by the end of this year or at the latest the first quarter of next year. 

Unlike Dubai, Abu Dhabi rental costs have not gone down as much as those in its adjacent emirates.  The letting prices of apartments and houses in the inner city continue to be elevated and have only diminished to some extent in the core of the city. This is principally because of a deficiency of finalised flats in the capital. In terms of provision, Al Raha Gardens has only lately joined the market. We have seen a noteworthy raise in individuals looking to move to Dubai to take advantage of the cheaper rental price.  Nationals from other countries that have been existing in the urban regions of the town in mansion complexes such as in the Shahama and Al Raba area are moving to the city to profit from the improved freehold  projects available in Dubai.

Cityscape Abu Dhabi 2009, a yearly event that is all about real estate investment and development, saw only a small participation which had been foreseen by the majority of the real estate experts, exhibitors and investors given that the current global recession is still dominating this field.  Nevertheless numerous investors attended who were serious about purchasing accurately priced developments that are approaching a finishing point. On the whole, the show did not demonstrate a great deal of transactions with Aldar being the only company to reveal a novel development.

In general, the Abu Dhabi property market continues to look at a disparity between demand and supply. Provisions this year will be constrained to the Arabic neighbourhoods in Al Reef Villas and to small supplies in Al Raha Beach and Al Reem Island in the beginning of 2010. The key dilemma buyers will keep on coming across is the giant down-payment they need to pay to seal a deal given the divergence between banks’ property valuation and arranged selling prices. With any luck this condition will change as soon as stability comes back to the regional market. We are sure that in the close future the augment in rent prices will be hushed owing to the cheaper lettings being supplied in Dubai. This raise will surely decrease in time to come as an immense amount of stock begins to add to the market sometime 2011 to 2012.

News submitted by Iwona Szymańska, Hamptons International