Supply Not Catching Up With Demand

With the current limited supply of residential and commercial units in Abu Dhabi, Al Reem Island and Al Raha Beach come to ease the pressure between supply and demand.

The property market in Abu Dhabi has been the target of much focus since the global financial crisis hit the news. With Plan Abu Dhabi 2030, the government is keen on building up the emirate as a global financial centre by ushering investment into many of its sectors such as infrastructure, energy, education, and real estate amongst others. The aim is to expand the economy and move away from the dependence on oil revenue.

The freehold developments in Abu Dhabi real estate are concentrated on Al Reem Island and Al Raha Beach – both presently under construction with the handover expected to take place during Q1 2010. The major development duo comprises mixed-use communities spread across residential, commercial and retail units. Once finished, these developments should relieve the pressure on the current constrained supply of residential as well as commercial units in the whole emirate of Abu Dhabi.

Freehold properties in Abu Dhabi have witnessed a price drop since a peak was reached in 2008 with many projects withdrawing back to their respective launch prices.

While Abu Dhabi rent prices have reduced slightly in the last few months, these prices are still relatively high when compared to the prices in other emirates of the UAE. A great part of the Abu Dhabi workforce lives in Dubai and commutes in order to benefit from the lower-priced rents and the lifestyle Dubai offers. For 2009, the main accomplishment for Abu Dhabi has been to host the Formula One race on one of its new developments, Yas Island.