The property market in the UAE is picking up after a difficult period, data show.
In Dubai, demand is increasing in most sectors, but "the timing of recovery has been extended due to the excess of supply", said a report by the property services company Jones Lang LaSalle.
Abu Dhabi has also been affected by market forces, but its dynamics are different from those of Dubai.
"The impact of the market slowdown has proven to be less dramatic in Abu Dhabi than other markets in the MENA region as it occurred after only a few years of growth and because of substantive investor confidence in Abu Dhabi's long-term growth potential," Jones Lang LaSalle said.
Throughout the UAE, the value of projects planned or under way has levelled off in the past two years, a Bank of America Merrill Lynch report showed.
Office space is one of the most complex sectors in the region, with construction on new projects continuing in Abu Dhabi and Dubai.
Demand is expected to continue from companies looking to relocate to the UAE or upgrade their existing facilities here.
In Abu Dhabi, 1.5 million square metres of office space is expected to enter the market before the end of 2013, while Dubai is due to have 2.2 million square metres of office space come on to the market before the end of 2012.
In the Dubai office space sector, "the market will move further in favour of tenants", said Craig Plumb, the head of research for Jones Lang LaSalle's MENA region office.
But, after a subdued period, the outlook is better in the Dubai residential market, Mr Plumb said. "Residential is closer to the bottom," he said. "There is not so much further to fall on prices."
About 30,000 new residential units are due to become available in Dubai next year, Jones Lang LaSalle reported. "While the overall market continues do face downward pressure on pricing, the rate of decline has now slowed," it said.
In Abu Dhabi, a further 70,000 residential units are expected to come online, a 60 per cent drop from earlier projections, Jones Lang LaSalle forecast.
There remains a "substantial latent demand" for affordable and middle-class housing, the data showed.
