Abu Dhabi’s Property Market Proves to be the Strongest Emirate

Abu Dhabi’s Property Market Proves to be the Strongest Emirate

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central-abu-dhabi Abu Dhabi’ss real estate sector, appears to be showing a promising future as strong demand is expected to outstrip supply over the coming years. Rental grow rates of up to 65% over the last 12 months have resulted in a very low vacancy rates of 1% which is excellent.

One downturn of Abu Dhabi’s growth is the property price hikes home owners experienced in 2008. Prices overall have increased by 89% which has consequently resulted in reduced rental yields. Abu Dhabi is at the top of the regional chart when it comes to real estate, making it the most expensive city for rental and purchase in the UAE.

In comparison to Dubai where a square metre costs $420 for rental, Abu Dhabi is currently hovering around the $450 mark for the same. In the property market a square metre in Abu Dhabi sells for $6,500 compared to $5,420 for Dubai.

With the much discussed plan 2030, Abu Dhabi shows a promising future as a fundamental demand will continue to boost the market well beyond 2013. A recently released report by Citigroup even indicated that the current demand will only be met in 2012 giving investors enough room to cash in on the market.

The report further stated that predicted population growth and a reduction in the average household size would further create a shortfall of units by 2012. They estimate some 84,000 units would be needed to create a balance between supply and demand by then.

As commercial hub, Abu Dhabi also offers opportunities for those who are in a position to play the current market.With rents cheaper than Moscow and Singapore, Abu Dhabi is favoured by a growing supply of corporations who seek more favourable conditions for their team of office workers.

Photo credits: Central Abu Dhabi [Carlito via flickr]