Demand outstripping supply
The supply of residential property in Abu Dhabi is lagging well behind demand despite the global economic slowdown, according to analysts...
The rental market in particular has suffered with very limited residential stock and as a result rents escalated in 2008, the latest Property Insight report from CB Richard Ellis shows.
Changing economic conditions have seen speculators fall away and the end user is now is now taking centres stage, the report also indicates. Signs are also emerging of property price corrections.
But it is not all negative for the Abu Dhabi property market. 'A relatively successful Cityscape Dubai saw the launch of AED7 billion in new Abu Dhabi projects, particularly on Reem Island, the report says.
However, the report warns against complacency even although there is strong Government support for the real estate sector.
'Whilst AD has a healthy financial position, a shrinkage in domestic secondary property sales volume and prices reflects the widespread effect of the global downturn. Clearly there is no simple solution but one of the main challenges ahead is ensuring any form of intervention acts as an effective stimulus to confidence in the AD market,' said Arlene Isito Jimenea, Research Analyst, CBRE Middle East (Abu Dhabi).
The report predicts that the present economic situation will present opportunities for developers and end users. Developers will become more cautious and only pursue well planned, quality projects. End users will benfit from a better quality product.
The report concludes that although 2009 will be challenging for the real estate sector the market remains 'significantly under supplied' across almost all sectors and so offers an environment conducive to continued growth but at a less aggressive pace than before.
The year ahead is also an opportunity for the Abu Dhabi Government to address property regulation which will put the emirate in a better international position.
Source: www.propertywire.com