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Abu Dhabi housing demand boosted by decree for employees to live in emirate

Demand for housing in the capital is continuing to rise six months after a decree mandating that all government employees live in the emirate of Abu Dhabi.

Demand for housing in the capital is continuing to rise six months after a decree mandating that all government employees live in the emirate of Abu Dhabi.

"Residential is starting to pick up," said Talal Al Dhiyebi, the head of portfolio and development management at Aldar.

"Our take-up week on week is quite [good]. Our leasing teams are struggling. We need to beef up some of those teams to cater for the ongoing demand."

He said that there had been an increase in rental rates across Aldar's portfolio since the decree was announced last September, particularly in its Al Raha Beach development which includes Al Zeina, Al Muneera and Al Bandar. The decision affects all government bodies.

In the past quarter alone, rates rose 4 to 6 per cent, he added.

"When the rental rates go up there is generally a couple of months' lag and then you start to see sales rates go up because the yields are going up. People are much more interested in buying property because they feel there is a stronger rental market and rates are at a very healthy position."

The rental rises are, however, at odds with the general market.

CBRE calculated that housing rents across the city fell 3 per cent to between Dh70,000 (US$19,059) and Dh150,000 a year for a two-bedroom flat during the first three months of the year and look set to sink lower this summer as 17,000 new homes come to the market this year.

"I think the rental market is something that we should look very carefully at," said Simon Azzam, the chief executive of Bloom Properties, who was more optimistic about the sector's prospects.

"I strongly believe that the rental market will always remain as the strongest market in real estate."

He said sales are also expected to improve this year and going forward, but some companies are already seeing the results.

Tourism Development & Investment Company (TDIC) revealed this week that it sold 30 of the 33 villas it released for sale in the third phase of the Saadiyat Beach Villas scheme on the day it launched.

"We have recently witnessed significant growth in the real estate market in Abu Dhabi and in the UAE in general, which is evidence to the return of confidence in the investment sector, supported by the availability of liquidity in the market and the bank's offering of various financing options," said Ahmed Al Fahim, the executive director of marketing, communications, sales and leasing at TDIC.

 

gduncan@thenational.ae

 

@ For archived coverage of CITYSCAPE ABU DHABI 2013, go to thenational.ae/topics

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