TASWEEK CEO Masood Al Awar
The UAE’s real estate landscape, particularly those of Abu Dhabi and Dubai, continues to live up to the positive expectations expressed by industry players and observers at the start of the year. The latest detailed market intelligence report issued by TASWEEK Real Estate Development and Marketing painted a bright property picture for both emirates marked by rising property sales, steady supply, and growing investor confidence. TASWEEK CEO Masood Al Awar explains that the renewed confidence is the result of two major factors: strong returns on investments and the improving ability among developers and owners to meet their financial commitments.
Abu Dhabi is expected to enter a coming decade of steady real estate growth and development. Focus is currently on Abu Dhabi Island projects such as Reem Island, Al Raha Beach, Saadiyat Island and Yas Island which are attracting significant investor interest. Recent turnovers such as the second batch of luxury Eastern Mangroves apartments indicate end-to-end market expansion.
Over the past six months of price fluctuations, prime properties within Al Raha Beach, Saadiyat Island and the Corniche area have witnessed rental growth of between 2 and 8 per cent for new leases. There has been a marked shift among residents towards more modern developments, contributing to lower rents in older areas by 5 per cent. This trend has been encouraging people commuting to Abu Dhabi from Dubai for work to relocate. Overall, lease rates across the capital are expected to steadily increase from the second half of the year to further energize the local markets.
There are other factors that are expected to further drive local market growth: the allocation of AED 330 billion by the Abu Dhabi Government for various projects across multiple sectors, which has placed the emirate among the top investment destinations in the world; and the announcement that staff of companies owned by the Abu Dhabi Government have to relocate to the capital before September to retain their housing allowance.
After being declared by Forbes as the second hottest property market in the world in 2012, Dubai once again proved its rebounding appeal among global real estate investors by posting its 16th consecutive monthly increase in property prices and rents in 2013. This indicates the local property market’s steady and sustained recovery.
The value of property sales in Dubai rose 63 per cent for 2013, with an average of 32 transactions completed every hour. Demand grew from end to end, with luxury properties in even the most exclusive parts of the emirate posting strong sales. Dubai’s buyers and sellers engaged in a total of 14,260 transactions for the first half, collectively valued at AED 44 billion.
Dubai is currently a profitable market due to its higher population growth rate and stronger investor pull. March 2013 property prices in the emirate climbed 18.3 per cent over the previous year, with Dubai ranking among the top five best performing real estate markets in the world. The Dubai Government has expressed full support in increasing global confidence for the local property market.
Abu Dhabi and Dubai, the main protagonists of UAE real estate, continue to draw renewed global investor confidence and achieve end-to-end growth.
Al Awar notes the recent review of best experiences and international practices related to real estate mortgage loan regulations conducted by the Regulatory Development Unit of the UAE Central Bank as a critical market factor. He explains that proposed real estate financing ratios will impact the balance of supply and demand. He adds that enhanced services and job creation programs will help sustain the currently positive industry trends for the coming years and that this year remains on track to become a tipping point for an industry that has been displaying solid recovery since late 2012.