Signs of Abu Dhabi property markets recovering
Prime residential property prices in Abu Dhabi increased by 5% in the second quarter of 2013 amid signs that the emirate’s real estate market is recovering.
The latest analysis from property services firm Jones Lang LaSalle shows that this rise follows an 8% increase during the first quarter as regional investors have been lured by the emirate’s safe haven status following political unrest in the wider region.
Jones Lang LaSalle added that major economic developments and city building initiatives, has led to increased job stability and liquidity and boosted the property market.
The report also showed that during the second quarter of 2013 Abu Dhabi’s prime residential rents remained stable, following 8% growth in the first quarter of the year.
‘This can partly be attributed to the government regulations to reduce the level of commuting from Dubai, together with government economic development initiatives leading to further job growth,’ the JLL report said.
‘In addition, as new residential districts within master planned areas obtain better amenities and achieve critical mass, this is leading to rental premiums for higher quality product. Rents in secondary quality residential stock have continued to fall,’ it added.
David Dudley, regional director and head of the Abu Dhabi office at Jones Lang LaSalle, said that the first half of 2013 has been encouraging for the recovery of Abu Dhabi's real estate markets.
‘Prime office and residential rents have stabilised. Retail and hospitality sectors saw improved performance, and prime residential prices continued to rise during the second quarter of 2013,’ he explained.
The report also said, however, that the overall real estate markets remain in over supply, with additional new supply still in the pipeline leading to further increases to market wide vacancy rates.
It said during the first half of 2013, there has been an increased volume of residential sales transactions and price growth for prime product.
The overall office market remains over supplied, the report said, pending further progress with government economic development initiatives to diversify the economy and generate new jobs.
However, prime office rents have started to stabilise, with prime office rents having remained stable the last four quarters, it added.
‘While it is encouraging to see the market moving upwards again, it is important to note that these improvements do not represent a market wide recovery, but relate to selected high quality developments with performance continuing to diverge between high grade and low grade product,’ explained Dudley.
‘However, this is certainly positive news for the market, indicating the first signs of recovery and a maturing market,’ he added.