The first houses in Abu Dhabi available for ownership by foreigners from outside the Gulf are handed over to buyers.
First foreign owners take possession of Abu Dhabi homes
The first houses in Abu Dhabi available for ownership by foreigners from outside the Gulf have been handed over to buyers four years after the project was launched. Manazel Real Estate is delivering the homes at Al Reef, a development that comprises 2,380 villas and 1,810 apartments, located next to Abu Dhabi International Airport.
"I am very excited to move in," said Saeed al Dhaheri, a 28-year-old mechanical engineer who bought a four-bedroom villa and plans to move in with his family in two weeks. He is moving from the Bateen airport area of the capital and said he would enjoy the extra space of a back yard. However, the promised mosque, gym and playground were still not completed, although he had been charged Dh17,000 (US$4,628) for community services, he added.
Another owner said she planned to rent out her two-bedroom villa for Dh160,000 a year to capitalise on strong demand for high-quality rental properties. Faiza al Zarouni, the chief operating officer of Manazel, said owners were receiving their keys upon payment of their last instalment, equivalent to 35 per cent of the sales price. "The constructor delivered the project last month and now we are handing over the keys to our customers," she said.
The properties come with 99-year leases for non-GCC citizens, but these are expected to convert to freehold contracts when the relevant laws are passed by the Government. "This is the first project to be delivered in Abu Dhabi where all expatriates can buy, even though only on leasehold," said Andrew Covill, the head of investment sales at the property brokerage LLJ Property. Although construction is still under way at the site, some residents have already taken possession of their properties. Most of the completed villas have utilities such as electricity and water, but some problems remained, residents said.
Although the first villas were handed over six months later than originally scheduled, Manazel said it hoped to complete most of the remaining villas by the end of next year, in line with the original schedule. "In 2010 we are delivering other phases in batches," said Ms Zarouni. "The desert villas will be delivered during the first half of next year and the contemporary villas by the end of that year."
Al Reef's villas and apartments sold out after their launch in 2006 at an initial price of about Dh700 per square foot. Prices more than doubled on the secondary market before falling back from September last year, brokers said. Landmark Advisory, a property consultant in Dubai, estimates sale prices for two and three-bedroom villas now range between Dh500 and Dh675 per sq ft while apartment prices range between Dh700 and Dh800 per sq ft.
Landmark said transaction prices had remained stable throughout the last quarter of the year and were not expected to increase until more properties were handed over next year. "Prices are only likely to increase marginally for developments that are close to completion during 2010," said Jesse Downs, the director of research and advisory services at Landmark. Landmark said sales volumes fell this month from levels in November and October, two of the most active months of this year for Abu Dhabi, with interest focused on close-to-completion developments such as Al Reef Villas, Marina Square, Sky Tower and Al Bandar.
The consultant found that sellers in Al Bandar development had adjusted their expectations by reducing their asking price by about 9 per cent since September to Dh1,500 per sq ft in order to "start attracting more buyers that were until now focused on less expensive developments in Marina Square". Brokers say buyers stayed away from the market this month while waiting for clear signs of progress on nearly completed developments.
"Only a small number of investors are currently active in the market. The postponement of delivery dates, most notably for Al Bandar and Marina Square, may be further restricting demand," Ms Downs concluded. @Email:firstname.lastname@example.org