UAE | Housing & Property
Relief near for those trying to find affordable housing
Middle income groups in Abu Dhabi will be able to find affordable accommodation thanks to new steps taken by the government to ease the housing crisis, A senior official told Gulf News on Wednesday.
- By Binsal Abdul Kader, Staff Reporter
- Published: 23:38 January 7, 2009
- Image Credit: Gulf News archive
- Officials say that new steps taken by authorities will ease the housing crisis in Abu Dhabi.
Abu Dhabi: Middle income groups in Abu Dhabi will be able to find affordable accommodation thanks to new steps taken by the government to ease the housing crisis, A senior official told Gulf News on Wednesday.
"The government is responding to the situation [housing crisis] by offering incentives to investors to develop housing for [the] middle class," Juma'a Al Junaibi, general manager of Abu Dhabi Municipality, said in an exclusive interview.
The government is actively trying to motivate developers to focus more on middle-class dwellings by ensuring a fair return on their investment, Al Junaibi said, without elaborating further on the nature of incentives or the number of projects underway.
The economic boom witnessed in Abu Dhabi during the past few years has been one factor that has contributed to the housing problem, he said. "Unfortunately, such a situation emerged so fast that it has been impossible to address the problem," he said.
Demand is outstripping existing supply and, as a result, the market price for rental properties has increased sharply, he said. "Both the government and the private sector responded as quickly as possible to come up with solutions."
Al Junaibi said the private sector has numerous new housing projects in various stages of development on Abu Dhabi Island and nearby areas. The completion of the projects will boost supply of rental housing to meet demand and rents will stabilise, he said without elaborating on the number of projects underway or their expected date of completion.
"The annual rent cap of five per cent fixed by the government is also cooling the soaring rents in Abu Dhabi market," he said.
Report nails problem
A report released by the Abu Dhabi Chamber of Commerce and Industry in October 2008 had recommended building complexes for low-income people. The chamber took note that the majority of projects announced in the capital were in the luxury high-end market, mostly villas and hotel apartments, leaving the mid-market under-served. The housing shortage in the capital is expected to grow to 70,000 units by 2010 with buildings under construction satisfying only 20 per cent of the demand this year, according to the report. Abu Dhabi currently has 320,000 housing units, which are expected to rise to 328,000 next year and 340,000 by 2010. The city must wait until 2013 for the expected delivery of an additional 140,000 residential units to "cool" the "overheated" housing market, said the report. "Supply shortfall is most acute in the middle-income segment while the highest demand is for one-bedroom and two-bedroom apartments," said Colliers International, a real estate agency.
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