Job stability drives Abu Dhabi home prices

Average asking prices of residential properties in Abu Dhabi’s investment areas rose “significantly” by eight per cent in the first quarter 2013 due to its safe haven status and job stability driving people to buy than rent, says a new report.

In its report on Abu Dubai real estate, Jones Lang LaSalle said average prices within investment areas rose to Dh11,000 per square metre from Dh10,200 sqm in fourth quarter 2012. Average asking prices for apartments stood at Dh12,000 per sqm, while average prices for villas were at around Dh9,900 per sqm.

“With increased job stability some people are preferring to buy property rather than renting and this demand is concentrated in investment areas. There is additional demand from investors looking to capture price growth from a potential future upswing,” the report stated.

The consultancy pointed out that these increases, however, did not reflect a “market-wide recovery.”

On the rental side, the wider market continued to experience declines, resulting in a further divergence of residential market performance. Prime buildings showed signs of stabilization and selective recovery, while secondary market continued to experience downward pressure on rents.

Moreover, rents in Abu Dhabi have become relatively more affordable since those in Dubai have begun to rise which is encouraging more renters to consider relocating to the capital.

Average asking rents for prime two bedroom apartments reached Dh130,000 per annum in Q1, increase over 8 per cent from Q4 2012.

However, JLL said the increase was largely restricted to selected prime developments where performance has improved due to a number of factors such as more community facilities being completed within master planned areas; job growth from major infrastructure projects; limited availability of high quality units for private rental and initial relocation of Abu Dhabi government employees from Dubai in response to new regulations.

16,000 new housing units

The capital, JLL said, is set to witness supply of 16,000 residential units this year of which nearly 2,000 units were released in the first quarter alone. Thus the total residential stock stood at 208,000 units at the end of Q1 2013.

The majority of these units were delivered in the Al Bateen Park Development, Al Reef Community, Saadiyat Beach Residences and Nation Towers on the Corniche.

The remaining 14,000 units are scheduled to be delivered are located in Eastern Mangroves Promenade by TDIC, Saadiyat Island, Al Bustan Complex on 29thStreet and several towers on Reem Island. Besides, a number of units are scheduled for handover within National Housing communities including Al Falahby Aldar.

Overall, the total residential supply in the capital will reach 252,000 units by end-2015 despite a number of residential projects announced prior to 2008 have been delayed.

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