Abu Dhabi’s property market will likely remain resilient this year on the back of firm economic growth and growing demand for properties, said the international property agency Chestertons.
Robin Teh, the agency’s country manager for the Middle East and North Africa, yesterday said the capital’s real estate sector continued to show signs of stabilisation, with average quarterly rental growth of 4 per cent because of the lack of prime apartments.
“In a city where rentals are always higher than in Dubai and housing is skewed in favour of high-end properties, the reintroduction of rental cap and increase in affordable housing will see Abu Dhabi go a long way to [becoming an] affordable and investor-friendly city,” he said.
Abu Dhabi is expected to mirror Dubai’s adoption of a property index that would split the city into various zones and set a rent guide for each area.
Rentals continued to be “a pressuring issue” because housing supply remained insufficient, said Chestertons.
Inflation reached a six-year-high during the second quarter this year.
Proposals for a new rental index in Abu Dhabi to replace the cap that was abolished in November 2013 should help to ease rising housing costs, which nudged inflation up to 5.3 per cent in April.
The rental index, which is being drawn up by the Department of Municipal Affairs, could be introduced by year-end.
Nevertheless, Chestertons remained “optimistic” about the property market, noting the steady introduction of new residential developments in Al Reem Island, Yas Island and Saadiyat Island.
In the villa market, sale prices remained stable in the second quarter. New projects were launched at Saadiyat Island, which saw “good demand”. About 6,000 units are expected to enter the market by the end of this year, according to Chestertons.
“Over the year, little respite is anticipated as supply is skewed towards high-end properties,” said Mr Teh. “The rumours on the rental cap are still unconfirmed, with certain areas experiencing rental hikes of as much as 50 per cent since 2013.”
Meanwhile, demand for “Grade A” offices remained high amid inadequate supply.
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