The Abu Dhabi real estate market seems to be in for a massive boost in recent years. Government initiatives look set to boost the real estate market in Abu Dhabi considerably, as per several reports and studies. Approximately 28,000 residential units will be added to the housing market in Abu Dhabi between 2020 and 2023 as per reports. They will add to the existing tally of 258,000 units. Reports have highlighted changes to the freehold regulations that have enabled freehold property ownership for expatriates in more than 15 designated zones for investments.
This will positively impact the residential real estate market in Abu Dhabi as well. Another major initiative that may impact purchase decisions for residential property in Abu Dhabi could be the unveiling of the Gold Card system for the United Arab Emirates (UAE). This may benefit property purchases in the long run since it offers a 10-year permanent residency for entrepreneurs, investors, scientists, brilliant students and chief executives. The competitive market trends have naturally made the market more in favor of end users at the moment, particularly in Abu Dhabi, as per experts.
Some other important things to remember
According to experts, taking the present business appetite into consideration, there is higher potential for real estate developers to come up with more creative and innovative schemes. These will help in better and more fulfilling engagement with home buyers and investors alike. In the office segment, landlords have lowered overall service charges and are currently providing longer rent-free durations and capex contributions as strategies for sustaining higher levels of occupancy. Experts feel that the commitment of the Government is praiseworthy when it comes to unveiling new initiatives that boost economic growth and overall investments in the market. They feel that under such dynamic leadership of the UAE Government, Abu Dhabi should see a massive boost to its property market in future years.
In H2 2019, demand for hotels has been positively affected after major events in the Emirate like the Abu Dhabi Showdown Week, AFC Asian Cup, Special Olympics, Papal Mass and Formula 1 among others. The hospitality sector is expected to witness the addition of 9,300 keys within a period of three years as per reports, which also state that hotel occupancy rates have grown considerably in the capital. This can be attributed to various pro-active measures taken by the UAE Government in 2019 including the reductions in tourism, municipality and hotel room fees and charges. Office space demand should also be backed by Government measures for creating new jobs and also scaling up overall economic activity in the UAE. By end-2019, existing supply levels of office units touched 4.3 million sq. m in GLA (gross leasable area) with expected delivery of an extra 0.6 million sq. m in gross leasable area (GLA) by the year 2023. There will also be increased focus on Ghadan 21, the economic stimulus package spanning 3 years and $13.6 billion in total. This has a blueprint for creating more jobs and boosting the office sector’s overall market performance. It goes without saying that such initiatives will massively boost Abu Dhabi’s property market.
What experts feel
Market experts feel that changes made to the freehold regulation/law that have made it possible for expatriates to have ownership of freehold property across 15+ specific investment zones, will be a major game-changer for real estate in Abu Dhabi. The Gold Card system will be the icing on the cake as far as positively impacting the residential realty market is concerned. The hospitality sector, according to experts, will keep witnessing steady growth post the launch of the $163.36 million or Dh600 million initiative by the Abu Dhabi Department of Culture and Tourism for boosting the portfolio of business and entertainment events taking place in the capital.
The total numbers for hotel guests touched a whopping 3.8 million people for the third quarter of 2019 which indicates 2.9% of growth as compared to the same period in 2018. The hospitality sector has already touched 33,000 keys in the second half of 2019 as per reports. Allowing foreign ownership of 100% in specific sectors and the unveiling of the Hub 71 incubator fund for technology start-ups and venture capital firms, are major decisions that will spur demand for more office space and commercial real estate in Abu Dhabi.