Abu Dhabi Predicted to Witness Shortage of 51,000 Residential Units By 2018

0
987

Abu Dhabi’s real estate market is recovering full-speed and it is said to have an impressive performance in short-to-medium terms. This was the conclusion in Colliers’ Abu Dhabi Real Estate Market Overview for Q2 2014. However, the report also stated that the city’s residential market will witness a shortage of about 51,000 units by 2018. According to Colliers, that will be mainly due to the fact that the demand will be greater than the supply.

The research claims that Abu Dhabi’s residential market will welcome around 241,000 units by the end of 2014. Nevertheless, the demand will be even higher and will hit 292,000 units in upcoming months. In addition, the report stated that within the next four years, the demand on the city’s residential market will surpass 360,000 units in 2018.

Rental values and sales prices are also predicted to jump this year. According to Collier, property prices in UAE’s capital will increase by 9% during the second quarter of 2014. Rental values, on the other hand, are said to increase by 12% during the same period.

Also, the research states that Abu Dhabi will become a very profitable property market in terms of investment/return (yield). That will happen mainly thanks to the city’s rental cap removal.

Unlike Abu Dhabi’s residential market, its commercial real estate market supply will be bigger than the demand. It is predicted that the market will see an excess of 198,000 sq. m. this year. However, the research points out that Abu Dhabi’s office market is generally oversupplied and the high vacancy rates in the city will not be a new trend.

The highest demand in the city is expected to be focused in areas like Al Reem Island and Al Marayah. In addition, both sales prices and rents on Abu Dhabi’s commercial property market.

Abu Dhabi’s retail property market will also see an increase in the short-to-medium run. Still, compared to Dubai, the city’s retail property sector will continue to be more limited. Also, even though the city’s population is set to increase, its retail market will remain tourism-oriented.

Colliers International states that developers have finally become more willing to invest in lower and mid-end projects. According to the report, they have finally noticed that the high-end market in Abu Dhabi has become overcrowded.

LEAVE A REPLY

Please enter your comment!
Please enter your name here