{"id":995,"date":"2016-01-08T14:18:00","date_gmt":"2016-01-08T07:18:00","guid":{"rendered":"http:\/\/www.siamlandbank.com\/propertynews\/?p=995"},"modified":"2016-01-08T11:33:45","modified_gmt":"2016-01-08T04:33:45","slug":"what-to-expect-from-the-abu-dhabi-property-market-in-2016","status":"publish","type":"post","link":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/what-to-expect-from-the-abu-dhabi-property-market-in-2016\/","title":{"rendered":"What to expect from the Abu Dhabi property market in 2016"},"content":{"rendered":"


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\nThe Abu Dhabi real estate sector was something of Dr Jekyll and Mr Hyde last year. Sales prices have been flat since the last quarter of 2014, but leasing failed to read the script and was up by as much as 7 per cent in some areas last year, according to JLL \u2013 although that is still much reduced from the pace in 2013 and 2014. What has caused this divergence, and what will sales and leasing do this year?
\nOn the supply sideWhen it comes to new units coming on to the Abu Dhabi market, the property pipeline is looking bare. Many new projects are planned, such as Mamsha on Saadiyat Island from Tourism Development and Investment Company; Ansam, Mayan and West Yas on Yas Island from Aldar; and Al Hadeel on Raha Beach, also from Aldar. These are just a few examples \u2013 but these projects will not come online until at least next year. Abu Dhabi\u2019s large developers were badly stung by the 2008 crash and have lain dormant almost ever since, with only the serious rental spikes in 2014 prodding them out of their slumber and back to the construction site. High-rise buildings have a lead time of up to four years, so the delay in restarting stalled projects or launching new ones has long-term effects. Most third-quarter 2015 reports are saying that only 2 to 3 per cent will be added to the total housing stock per year over the next two to three years.
\nDemand stays strongDemand for units in Abu Dhabi, at least on the leasing side, has remained strong, as according to most reports rents went up by 5 to 7 per cent last year. This rise was mostly because of the low supply coupled with an increasing population. Population predictions in such a fluid, immigrant-based economy are hard to come by, but according to the Statistics Centre Abu Dhabi, the average annual population growth rate between 2005 and 2014 was 7.6 per cent. If this holds, then population will continue to outstrip housing supply and rents will continue to rise \u2013 simply put, demand is greater than supply.
\nThe oil effectBut what of the oil price slump? Will this affect population statistics? According to Monster.com, it seems it has not yet. Companies are still hiring even in the middle of what would seem like reduced sentiment in the region. Abu Dhabi\u2019s population is closely linked to government spending and jobs, so people will be looking closely at the emirate\u2019s budget for this year. The federal budget was cut by a modest 1.1 per cent for the coming year, and Dubai\u2019s budget was increased by a whopping 12 per cent. The IMF said it expects the UAE economy to grow by 3 per cent this year, so outlook is reasonably positive. Rents should increase at an inflation level of 4 to 5 per cent this year.
\nOutlook for salesIt seems that people are holding their breath waiting to see what will happen in a new \u201clower for longer\u201d era of oil prices, and how the Abu Dhabi government will respond. Continued increases in rental prices should signal rises in sale transactions, but the two have temporarily decoupled over the uncertainty. This has led to yields on investment property getting bigger and some rich pickings for more confident investors. A positive budget and continued rent increases would snap the uncertainty in the back end this year, and a flood of investors could return to take advantage of high yields, with end users buying to control rents.
\nInterest ratesThe fly in the ointment for sale prices may be interest rates. The US Federal Reserve is expected to raise rates by a further 0.5 per cent through this year (and the UAE is likely to follow because of the dirham-dollar peg). Couple that with lower liquidity in the UAE banking system as the government withdraws money, and borrowing will get more expensive. Expensive borrowing makes buying harder for end users and less profitable for investors using leverage.
\nThe property market will generally hinge on population statistics. If people keep arriving, then rents will rise and returns will start looking too good to ignore; buyers will come back to the market in droves to take advantage of yields and cost savings. However, if Abu Dhabi\u2019s government spending falls and it lays people off outside the oil and construction sectors, which have taken the brunt of the reductions, then the population might stagnate. If that happens, there will be bloated housing inventories and sale prices and rents will start to fall.
\nBen Crompton is the managing director of Crompton Partners Estate Agents.pf@thenational.aeFollow us on Twitter @TheNationalPF
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\nSource : thenational.ae
\nRead more…What to expect from the Abu Dhabi property market in 2016<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The Abu Dhabi real estate sector was something of Dr Jekyll and Mr Hyde...<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true},"categories":[1],"tags":[],"class_list":["post-995","post","type-post","status-publish","format-standard","hentry","category-property-news"],"jetpack_featured_media_url":"","jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p75ss1-g3","jetpack-related-posts":[{"id":48854,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/abu-dhabi-developer-aldar-sets-sights-on-yas-and-reem-projects\/","url_meta":{"origin":995,"position":0},"title":"Abu Dhabi developer Aldar sets sights on Yas and Reem projects","date":"March 21, 2017","format":false,"excerpt":"\r Aldar Properties expects to invest Dh1.9 billion in developing four new projects on Reem Island and Yas Island in Abu Dhabi as part of the company's plans to boost its recurring revenue. Abu Dhabi's largest listed property developer said on Monday in a statement it plans to build a\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":10418,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/abu-dhabi-developer-aldar-to-build-1315-villas-on-yas-island\/","url_meta":{"origin":995,"position":1},"title":"Abu Dhabi developer Aldar to build 1,315 villas on Yas Island","date":"April 11, 2016","format":false,"excerpt":"\r \r Abu Dhabi's largest property developer has announced plans to build more than 1,000 villas on Yas Island.Aldar Properties unveiled plans for Yas Acres, a Dh6 billion project of 1,315 new villas which it plans to build on the northern shores of Yas Island alongside a golf course, club\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":51701,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/aldar-closes-in-on-early-completion-of-abu-dhabi-projects\/","url_meta":{"origin":995,"position":2},"title":"Aldar closes in on early completion of Abu Dhabi projects","date":"April 12, 2017","format":false,"excerpt":"\r Aldar Properties has said that it is nearing completion on two of its new Abu Dhabi housing projects ahead of planned hand\u00adovers in this autumn.The developer said in that it was on track to hand over its Ansam project on Yas Island and Hadeel on Raha Beach in September.The\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":40902,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/aldar-property-projects-in-abu-dhabi-move-closer-to-2017-completion\/","url_meta":{"origin":995,"position":3},"title":"Aldar property projects in Abu Dhabi move closer to 2017 completion","date":"January 17, 2017","format":false,"excerpt":"\r Two new luxury projects by Aldar Properties in Abu Dhabi are on track for completion this year, the developer said.It said steady progress was being made across all of its projects, with Yas Island's Ansam and Al Raha Beach's Al Hadeel moving closer towards completion and handover this year.Al\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":11496,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/aldar-gives-update-on-abu-dhabi-residential-projects\/","url_meta":{"origin":995,"position":4},"title":"Aldar gives update on Abu Dhabi residential projects","date":"April 27, 2016","format":false,"excerpt":"\r Aldar Properties said today that its projects in Abu Dhabi are progressing on schedule.\"Al Hadeel, Ansam, Al Merief, Nareel Island residential projects are all on track to be completed according to their respective schedules with steady progress being made on foundational, structural and MEP work,\" it said in a\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":14834,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/aldar-develops-the-heart-of-abu-dhabis-vision\/","url_meta":{"origin":995,"position":5},"title":"Aldar develops the heart of Abu Dhabi's vision","date":"May 30, 2016","format":false,"excerpt":"\r The sleek, modern luxury of the Yas Acres' sales centre on Yas Island is a throwback to the glory days of real estate eight or nine years ago. Except there is a very 2016 feel to it all. The 1,315-villa project's every detail is shown to prospective buyers on\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts\/995"}],"collection":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/comments?post=995"}],"version-history":[{"count":0,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts\/995\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/media?parent=995"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/categories?post=995"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/tags?post=995"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}