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Abu Dhabi: Falling oil prices have not had an impact on demand for real estate in Abu Dhabi, with investor sentiment remaining positive, according to Wouter Molman, director of Cityscape Group at Informa Exhibitions, the organisers of Cityscape Abu Dhabi.
Despite oil prices being cut in half in just a few months and the resulting potential slowdown in the economy, Molman said that one of the trends in the industry was the focus on quality and location.
“It’s interesting how Abu Dhabi in that sense is slightly different from Dubai where here [in Abu Dhabi], the focus is on these quality locations, and that’s where the demand is. In Dubai, there’s more focus on affordable accommodation,” he told Gulf News.
Molman attributed the difference to limited supply in Abu Dhabi’s high-end locations, which puts upward pressure on demand.
With Cityscape Abu Dhabi coming to a close on Thursday, he said he did not see a change in demand this year compared to previous years as a result of oil prices.
“There’s no denying that if lower oil prices sustain, that’s going to have an impact on the government spending at some point. I believe that the commercial property market is going to be the first one affected by that because companies will obviously postpone decisions to move to new offices,” he said.
However, Molman said that the bulk of new project launches at Cityscape were in the residential sector, which did not see a drop in demand.
He added that any impact of lower oil prices would be on the long-term rather than the short-term.
“Going by the sales figures that our exhibitors informed us about, there is no impact on demand that we’ve been able to see. In fact, [demand] has been very positive,” the director said.
Strong purchasing power
Developers participating at Cityscape agreed, with Aldar Properties citing Abu Dhabi’s healthy economy as a factor behind strong purchasing power, and hence, strong demand.
“The fundamentals of the Abu Dhabi property market remains strong, with steady population growth translating into increasing demand for high quality housing.
Abu Dhabi residents want communities and infrastructure-enables developments, and so we have launched West Yas and Mayan on Yas Island, and Meera in Shams Abu Dhabi on Reem Island to meet this demand,” Talal Al Dhiyebi, Aldar’s chief development officer, told Gulf News in an emailed statement.
Meanwhile, looking at the industry’s outlook, Cityscape’s Molman, said he expected growth especially in the leasing segment, albeit in the single-digit range rather than double-digits.
The ninth edition of Cityscape Abu Dhabi, which took place at the Abu Dhabi National Exhibition Centre (Adnec) from April 21-23, saw over 130 exhibitors, with organisers announcing an expected footfall of around 17,000 people.
Around 81 per cent of Abu Dhabi-based developers launched new projects at the exhibition this year including Tourism Development and Investment Company (TDIC), Urban Planning Council, Aldar Properties, and Al Forsan Real Estate, among others.
Cityscape Abu Dhabi also saw participation from exhibitors from various countries such as Egypt, Jordan, Lebanon, Kuwait, Portugal, Serbia, the UK, and the US, among others.
Source: Sarah Diaa, Staff Reporter, gulfnews.com