UAE | Housing & Property
High-end units to be in demand
With financing companies estimating the high-end demand in the domestic property market to be about 5 per cent, new developments in the capital are being pitched towards buyers or tenants with monthly incomes of over Dh15,000.
- By Ahmed A. Elewa, Staff Reporter
- Published: 23:36 May 3, 2009
Abu Dhabi: With financing companies estimating the high-end demand in the domestic property market to be about 5 per cent, new developments in the capital are being pitched towards buyers or tenants with monthly incomes of over Dh15,000.
"More attention is needed for less costly units," said Adel Al Shirawi, chief executive officer of Tamweel.
If developers stick to the delivery dates, forecasts predict that by 2009 the supply will far surpass the demand. However, a recent report by Shuaa Capital and Colliers International negates such notion, as the over-supply will only address high-end buyers or tenants.
"Abu Dhabi's supply in the high-end market is expected to be a meagre 1,100 units, while the additional annual demand in the same year is projected to be for 21,900 units," the report revealed.
With the first large-scale deliveries in Abu Dhabi expected to take place in 2008, when 11,000 units are delivered, the projected demand will still be higher at 24,000 units.
The 150,000 units due to hit the market by 2009 will also not solve the problem.
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Some banks have optimistic projections. "There are major developments taking place in Abu Dhabi, with new industries being established," said Eirvin Knox, CEO of Abu Dhabi Commercial Bank.
People employed by these new establishments will put new pressure on the demand according to Knox.
"Landlords will always find their way around the rental cap, which distorts the market," said David Nunn, the partner at Simmons and Simmons.
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