Country-wide realty boom
Statistics released by Bayut.com reveal that the UAE is becoming increasingly expensive. Property prices, which rose throughout 2013, continued their upward climb in the first quarter of 2014 and buried any speculation of a bubble.
During Q1 2014, property prices in the UAE experienced an overall hike of 35.9% compared to Q1 2013. For residential apartments, there was an average increase of 14.35% in prices compared to the Q4 of 2013 and a significant 36.56% gain compared of Q1 of 2013. Villa prices in the UAE also witnessed an average increase of 35.24% over Q1 of 2013 and an increase of 11.27% over Q4 of 2013.
Dubai has focused its attention on attracting new investors. In fact, Deyaar Development received approval recently to allocate 25% of shares for foreign investors. The company currently allocates 49% of its shares to GCC citizens and foreign investors.
While Dubai's growth continues rapidly, Abu Dhabi has focused on urban development. Average apartments increased by 11.5% in Abu Dhabi year-on-year compared to the 26% in Dubai, according to figures from real estate consultants Jones Lang LaSalle. "We have seen a rebound in residential activity in Abu Dhabi over the past 12 months, driven by government intervention and positive economic growth," said Mat Green, head of research and consultancy at CBRE Middle East.
"Abu Dhabi is different in demographics, different in geography, different in outlook," said William Neill, head of the Abu Dhabi office at property consultants Cluttons. "I don't think you will see the real fast rises and drops that Dubai is prone to and gets affected by. What happened in Abu Dhabi (during the downturn) is more in line with what happened to global markets during the recession," he added.
Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. Dubai's real estate sector has been the centre of attention for several years now, but now, it's the entire UAE's property sector that is seeing growth. Abu Dhabi is expected to focus on sustainable real estate units over the next decade or so and is reported to have at least 32,000 new housing units in 2014 only. It's yet to be seen what this country-wide boom means for Dubai's rapid growth and whether it can help prevent the kind of speculation that caused the 2008 crash. We'll be following up on these trends in the coming months to ensure our readers are up-to-date with all things real estate so be sure to stay tuned in.