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The UAE real estate market has been riding high with prices rising gradually due to the recent financial growth in the country in the last couple of years. There has been an increase in financiers' interest as evidenced at the recent Abu Dhabi Property Market Exhibition held early this year. This enthusiasm was influenced chiefly by recent regulations imposed by the government and the UAE's successful bid to host Expo 2020, which has not only increased investor security by restricting impulse buying but also brought on competitiveness in the lenders' market.
Also, Cityscape Abu Dhabi, which is just around the corner and scheduled to take place on 22 to 24 April, and now in its eighth season, has impressed everyone with an increase of 26% in its pre-registered visitors compared to last year, out of which about 16% are looking for residential property investment opportunities as mentioned by Informa exhibitions, organizers of Cityscape Abu Dhabi 2014.
Featured in Knight Frank's Wealth Report as one of the top 10 fastest-growing property markets in the global real estate consultancy's Prime International Residential Index (PIRI), the property prices in the emirate rose by 15% last year – a result of some steps taken by the government.
Firstly, in September 2013, Abu Dhabi public sector employees living outside the borders of the capital were instructed to relocate or lose housing allowances. This forced thousands of them to relocate which, in turn, affected the demand in the property market. Also later, after a few months, the 5% rent cap was removed, encouraging most investors to increase rents by almost 50%. With the increase in rents, some tenants who could afford it shifted to becoming investors leading to an increase in sales demand.
With the general increase in demand in 2014, analysts predict that the supply may double as compared to the supply in 2013. Also, with most of its wealth from the oil sector, which is not enticing to most foreign expats, the emirate may look at expanding in the private sector viz. banking, travel and tourism, hospitality, and so on, to catch the eye of global investors.
• Abu Dhabi Property Market Exhibition early this year considered a success
• Cityscape Abu Dhabi pre-registrations increased by 26% compared to last year
• According to PIRI report, property prices in the emirate rose by 15% last year
Source: Richard Shearer, Special to Properties, gulfnews.com
The writer is Managing Director, FAM Properties