The first seven months of 2015 have been favorable for realty sector in Abu Dhabi. Although the sales for the residential and commercial sector have stayed the same, the rental sector has seen a substantial growth. Taher Suterwalla, just like all the analysts, was expecting a cost cutting from the government’s end due to decline in oil prices, but that hasn’t happened. The rental growth in residential sector has been around 11%. This is because of a gap in the supply and demand. Demand is high whereas supply is still low. And especially across all prominent locations, the growth in the rents has been around 20%. The residential retail sector has not seen much of a growth. The growth that was around 24% last year hasn’t been carried to the year 2015.
Till November 2013, Abu Dhabi had put a cap on the rental growth to 5%. But as it was removed, the growth spiked suddenly. In order to safeguard the tenants’ interest, Abu Dhabi Department of Municipal Affairs has planned to bring in a provisional index to keep a check on the rental price growth. However this doesn’t mean the growth would be hampered, it just might not be very steep. Taher Suterwalla had already considered Abu Dhabi a lucrative option for making investments pertaining to the hospitality sector, but perhaps the gears have changed.
The Urban Planning Council of Abu Dhabi has already given approval to 22 new large scale projects this year. This is a clear indicator of the fact that a decline in the oil prices hasn’t affected the real estate sector. The demand remained relatively flat for last few years but it isn’t the case now. The demand is high and the market is open to be explored. Taher Suterwalla has already eyed Abu Dhabi as a prospective site for business expansion. Guess the day isn’t far when Abu Dhabi will catch up with Dubai in terms of growth.
abu dhabi, taher suterwalla