Property in Abu Dhabi will see strong growth in prices in 2013 led mainly by an influx of public sector workers needing somewhere to live.
That’s because the government recently decreed that all of their employees, and those working for government agencies, must live within Abu Dhabi.
This has led to a surge of people leaving Dubai to find a new home in Abu Dubai.
In addition, it appears that many workers in the construction, airline and professional services industries have also followed the migration and they are looking for quality rental properties.
One real estate firm, Cluttons, says the move to Abu Dhabi is also helping to push up the rents for properties.
Homes in short supply
Also, they say that demand and low supply is pushing up the price of property in developments at Al Reem Island, Raha Gardens and Raha Beach. The two latter locations account for 40% of all enquiries with Cluttons.
Their next most sought-after location is Al Reem which accounts for another 30% of enquiries since this is well located and has easy access to the city. The neighbourhood is also proving popular with those opting to leave older buildings – another trend which Cluttons says is also becoming apparent.
However, they say that those landlords who are trying to rent out older buildings have to lower their demands as vacancy rates for those buildings increase.
Property analysts in Abu Dhabi say that redeveloping older buildings is becoming more important to help protect rent levels and keep vacancy levels low.
The rent for an older two bedroom apartment in Abu Dhabi is around £16,700 a year – a price that has already dropped by around 10% in the last 12 months.
Rents going up
With the increasing supply of newer, in-demand apartments, analysts say this downward trend looks set to continue.
However, the rents for newer apartments are increasing.
For instance, the average rents for two bedroom apartments has increased in the last six months alone in Al Reem by 10% to £18,450; in Raha Beach they have rocketed by 22% to £23,700 a year and in Raha Gardens by 18% for two bedroom villas with rents costing £28,000 per annum.
Cluttons, which has worked in the Middle East since 1976, says that real estate prices in Abu Dhabi are defying the trend across the region and look set to perform at a good level for the rest of the year.
They also say that the area also offers a better standard of living than many other places with substantial investment in schools, roads and other projects.
