x Abu Dhabi, UAESaturday 22 July 2017

Ensuring a vibrant real estate market

Cityscape, the region's premier property exhibition and launch pad for the showcasing of new housing stock, is back. And there's plenty to show off.

Visitors looks at a model of Musanada-South of Shamkha project by Abu Dhabi Urban Planning on the opening day of the Cityscape.
Visitors looks at a model of Musanada-South of Shamkha project by Abu Dhabi Urban Planning on the opening day of the Cityscape.

Cityscape, the region's premier property exhibition and launch pad for the showcasing of new housing stock, is back. And there's plenty to show off.

By year's, end more than 16,000 new homes will come on the market across the capital, The National reported yesterday, from luxury villas to gleaming high-rises. Add to this the 1,370 units under construction for Emiratis at Watani, a national housing project sponsored by the Government, and it's easy to see why these are indeed heady times for the capital's real estate market.

The question now is how to maintain the momentum.

Any surge in available properties is good news for Abu Dhabi, at least in the near-term. The extra supply will be a boon to buyers, as prices will continue to fall from historic highs. It will also help to maintain a degree of competition within the market, as consumers will have the luxury of being more discerning in their selections.

The focus now will be to better manage supplies going forward. As analysts have long warned, without closer attention to vacancy rates and availability, units will continue to sit empty.

A gradual release of properties will allow the UAE's economy as a whole to better adjust. Over time it may also encourage a reversal of the shift towards Dubai for commuters - partly driven by high prices. Indeed, "affordable housing" was a phrase on many lips at the exhibition's opening yesterday.

Correcting the imbalance between affordable and high-end units will help settle the market. So too will economic diversification. It is preferable to create an economy that allows the real estate sector to benefit from - rather than drive - the economy.

Most important, though, are efforts to reform and improve the capital's regulatory environment. Much progress has been made on this front, including an important new mortgage law. Detailed property regulations are also forthcoming. But as Jones Lang Lasalle cautioned in its most recent quarterly prospectus, increased "transparency improvements and regulatory reform" will be critical to maintaining investor confidence in the months and years ahead.