Substantial growth to continue in Abu Dhabi
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News on Middle East
31 March 2008
The average prices of properties in Abu Dhabi are expected to surge by 25% this year, following average growth of 30% during the year ending January 2008, according to a fresh report compiled by HSBC.
The bank reports that soaring building material and labour costs, the falling value of the US dollar and low interest rates, and a shortage of completed property, will be the key factors that continues to drive significant property price appreciation.
Strong demand for rental accommodation has also seen strong rental increases in Abu Dhabi, with average rental growth of 22%, said HSBC.
Abu Dhabi is now trying to control rental inflation with a rent cap and has followed the example of Dubai in lowering its cap from 7% to 5%.
Editor’s comment
Supply constraints in Abu Dhabi should also ensure that 2008 is a strong year for Abu Dhabi’s property market. It’s been reported that there is currently a housing shortfall of around 20,000 units. This may encourage more property investors to flip off-plan units. AME Info recently reported that some investors’ are currently doubling their money in off-plan in as little as two weeks.
