Is it true that Dubai's property recovery will help house prices in Abu Dhabi? KT, Dubai
The pattern of the property market does, to a certain extent, follow suit from Dubai to Abu Dhabi. Dubai enjoyed four to five years of steady growth in property prices starting around 2004-05 and culminating in a dramatic crash towards the tail end of 2008/beginning of 2009.
Abu Dhabi also benefited from a good period of property growth as buyers looked to invest in the off-plan market expecting big returns. While Dubai has emerged from three-plus years of a property recession, Abu Dhabi still lags behind.
It would appear that from a sales point of view Abu Dhabi is potentially 12 to 18 months behind Dubai in terms of recovery. The rental market, however, is already showing signs of recovery. The reason for this could be on the back of the governmental rental decree permitting housing allowance only to government employees living in Abu Dhabi.
This, coupled with an influx of potential tenants from sectors such as education and health care, has boosted the numbers of people looking for accommodation. As a result the rental market has risen 5 per cent, although it remains to be seen if this surge in activity can be sustained to lead to a wider-based recovery in the capital.
Mario Volpi is the managing director of Prestige Real Estate in Dubai and has worked in the property industry in London and Dubai for the past 29 years. Send any questions to mario@prestigedubai.com
