Abu Dhabi’s residential property market has ‘adjusted’ and is “responding positively to challenging conditions”, a senior analyst has said.
Speaking at the Cityscape exhibition in Abu Dhabi, Craig Plumb, head of Research, at JLL MENA, stressed that the market is currently experiencing a period of lowdown largely because “it has reacted” to what is needed.
“The market has become more affordable, as developers have recognised the sweet spot isn’t super luxury, it’s at the middle market,” he said.
“The market is now providing for where the demand is. Developers have recognised that and are delivering a lot more product at that sweet spot.”
A recent report by ValuStrat found that residential property prices in the UAE capital during the first quarter of the year were down 12.2 per cent compared to Q1 2018, and 3.2 per cent below the previous quarter.
“Property is a cyclical business and we are in a period of a soft market. However, there’s not a huge amount of new supply expected this year or next,” said Plumb.
Developers are now more conscious about what they are planning and delivering, he said.
“In the residential market, we are looking at about 8,000 units for this year and even less next year, that’s about 3 per cent of existing stock and this is good,” he said.
“We are positive about what we can expect to see…The market has adjusted and is not just building a huge amount of supply that we saw three to four years ago,” he added.
On Wednesday, the emirate also announced that all foreigners will be entitled to own the freehold of land and properties which they purchase in investment zones. Previously, this was only permitted for UAE and GCC nationals.
As part of the changes, residential units in the zones will be registered under Abu Dhabi’s freehold law, with property ownership deeds issued to investors, according to a statement issued by the Abu Dhabi government.
Previously, foreign investors were generally offered only 99-year leases.
Talal Al Dhiyebi, CEO of Aldar said: “This is a game changing announcement for Abu Dhabi. This will not only further drive the maturity of Abu Dhabi’s real estate market, but will also increase transparency and provide clarity of title for property owners, increasing long term investment, injecting more liquidity into the market and encouraging longer term residency.”