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The rent-cap free real estate market in Abu Dhabi is capable of offering better residential rental yields compared to Dubai, according to analysts. This has helped restore investor confidence in the UAE capital and has created positive sentiment in the market.
Christopher Taylor, CEO of Abu Dhabi Finance, believes the regulatory changes that the capital has introduced, such as scrapping the rental cap, are key factors. The rise in employment opportunuties in both the government and private sector in Abu Dhabi has also contributed to the rise in the demand for residential units, he adds.
According to Reidin's Residential Property Price Indices report, there is a half point increase in residential property prices in the Abu Dhabi rental price index, from 62.90 to 63.40, which represents a monthly increase Of 0.72 per cent in January. On the other hand, prices increased 3.73 per cent year-on-year, the report added.
''It is essential for yields to remain at a sensible level to avoid an increase in short-term speculation and unhealthy levels of inflation, as well as ensuring that rental rates remain competitive,'' said Taylor. ''This projects positive market sentiments.
''The provision of clear plans such as Abu Dhabi 2030 is one of the key mechanisms, which will help Abu Dhabi attract longer-term investors. Continued development of real estate and mortgage-related laws and regulations would further help investors feel more comfortable in the Abu Dhabi property market.''
The short-term goals in the market include providing a wide range of property choices for residents, nonresidents and commercial enterprises, while the long-term strategy involves the emirate's transformation into a truly global city, he adds.
Source: Hina Navin, Special to Property Weekly, gulfnews.com