Dubai: If a tenant in Abu Dhabi is planning to make the switch to being a property owner, he or she better decide fast.
Only 8,000 units are scheduled to be ready for handover this year in the emirate, and there is a chance that many of these could experience a further delay before they are ready for occupation. Most of the new units will come through at Reem Island, Al Reef, Danet and Rawdhat locations.
So far this year, just 1,700 units have been added to the existing residential stock, according to the consultancy JLL, mostly apartments at Gate Tower 2 and Reem Diamond Building on Reem Island.
In addition, there were a few handovers of Saadiyat Beach Residences and at Al Reef Downtown.
Property sales in the residential market have seen a price growth for a fifth successive quarter. On a year-on-year basis, the upturn has been in the range of 25 per cent for prime units during 2013, and a further 9 per cent during the first quarter this year, JLL records.
“There is certainly demand for both purchase and rental properties both from a year-on-year basis and quarter-on-quarter, but the pool of property buyers is much more limited compared to what it is in Dubai,” said David Dudley, head of the Abu Dhabi office of JLL. “The general theme [for the Abu Dhabi realty market as a whole] is selective recovery — with different sectors at a different stage of recovery, and the residential sector leading the way.”
Funding availability
That certainly is happening, with the authorities confirming substantial funding availability for key infrastructure and housing stock creation (for UAE nationals). As for sales options available to non-UAE nationals, Aldar Properties on Monday announced two projects in ‘special investment zones’. But it will be next year before construction works are launched at either of them. (Off-plan sales are to start in May.)
While other developers are also expected to enter the fray with their own projects, for nationals and non-nationals alike, it will be a while before these are completed and free up some much needed supply in the broader market.
So, what are the options in the here and now? “The market has matured to a point where most of the existing master-developments are seeing residential, commercial, education and retail tenants/owners take occupation,” said Simon Townsend, business development manager at DTZ. “This is driving the confidence and attractiveness of these locations and enhancing developers’ ability to secure high levels of off-plan sales. Also, a number of developers were waiting for the various developments to become more established with infrastructure and facilities.”
Market sources also confirm that mortgage support is much more forthcoming. That would be a “strong catalyst” for the next round of off-plan launches. “We are expecting further [off-plan] announcements which should go some way to addressing the imbalance between secondary sales and off-plan sales,” said Townsend.
