Abu Dhabi property prices ‘certain’ to rise further

Country:  Abu Dhabi

26 June 2008

Average property prices in Abu Dhabi will continue to record double-digit growth in the foreseeable future, fuelled by growing demand to buy property for sale in Abu Dhabi, and an undersupply of properties, according to regional investment bank EFG-Hermes.

The report also forecasts that avearge rents in the emirate will also appreciate significantly, with 25% growth anticipated by the end of 2008, followed by a further 15% to 20% increase in 2009.

According to the Abu Dhabi Department of Planning and Economy (DPE) average rental prices in Abu Dhabi have already risen by 35% suring the first six months of this year, which suggests that the 2009 projected figure for rental price growth could be at the lower end of the spectrum.

Author of the report, Sana Kapadia, says: “A structural shortage of good quality space across the various types of real estate, combined with pent-up demand and strong immigration growth prospects underpin the supply-and-demand dynamics of the emirate's real estate market.”

A growing number of people – domestically and internationally - are looking at property for sale in Abu Dhabi, following the launch of landmark projects such as the Saadiyat, Yas Island, and Reem Island developments.
The fact that the government continues to control the supply of new housing in line with Plan 2030 should ensure that demand contunies to outstrip supply over the coming years.

“Caps on the amount of real estate that can be built on in a year mean that given the current supply and demand dynamics, where supply is not expected to catch up with demand over the next 18-24 months at least, prices and rents will continue to rise in all the real estate segments over the short to medium term,” says Kapadia.