Abu Dhabi’s Statistics Centre (SCAD) is reporting that the completion of new properties is rising. The SCAD analysis shows a 17.3% increase in residential properties in the second quarter of 2012 and experts believe the increase combined with emirate policy as it applies to civil employees will encourage a sharp rise in occupancy of the new rental space. Abu Dhabi does not allow government employees to avail themselves of a housing credit unless they live inside the emirate, which is likely to encourage them to move within the boundaries to save money on the new real estate. For more on this continue reading the following article from Property Wire.
The number of residential properties completed in Abu Dhabi in the second quarter of 2012 increased by 17.3%, according to the latest figures from the emirate’s Statistics Centre. A total of 3,302 residential units in 1,516 buildings were completed in the emirate of which 68% were in Abu Dhabi region, 9% in Al Ain and 23% in Al Gharbia.
The SCAD research found the estimated average construction cost per square meter during the second quarter ranged between AED3013 and AED3382, depending on the total floor area, the interior finishes and intended type of use. The data showed that owners generally spent more on the units when they planned to use them for their own residence.
Buildings with a total construction area of between 300 to 599 square meters had the highest construction cost of AED3382 per metre and were mostly dedicated for residential use by the landlord. The residential rental sector is likely to get a boost in the later quarters of 2012 after news at the weekend that Abu Dhabi is pressing its public sector employees who reside outside the emirate to relocate within its borders.
Employees residing outside the emirate will not be eligible for the housing allowance provided to workers in state institutions, the government said in a statement. The policy takes aim at people, believed to number many thousands, who commute to work in oil rich Abu Dhabi while living in the neighbouring emirate of Dubai because of lower rents there or a lifestyle which they see as more comfortable.
The new rule, which will take effect next year, will apply to citizens of the UAE as well as foreigners who are working in Abu Dhabi for the government and all its wholly owned entities and companies, the statement said. Analysts believe that the policy is designed to help absorb a large supply of new high end homes that is set to enter the market in Abu Dhabi this year.
Property prices in the emirate have tumbled about 50% since the global financial crisis hit the market several years ago, analysts estimate, and the new supply threatens to undermine them further. Many new units have come up in Abu Dhabi, reaching the peak of its development cycle.
'The move is to create new demand and make sure the vacancy rates don't reach high levels,' Matthew Green, research head at consultants CBRE, told Arabian Business.
This article was republished with permission from Property Wire.