Abu Dhabi house sales fall short of Dubai's

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Abu Dhabi's property market is growing rapidly, but developments do not sell out immediately in the way that Dubai witnesses.

A study by Deutsche Bank has found that the property market in Abu Dhabi has failed to ignite in the way Dubai did following relaxation of foreign ownership laws.

Mohammad Khan, a research analyst at the bank, said that compared to the pace of property sales in Dubai, Abu Dhabi developers appear to be experiencing "a more cautious buyer pool."

His research was based on a study of residential units being sold by Aldar Properties, the largest developer in Abu Dhabi. He found that of 5,000 residential units that have gone on sale since 2005, only 60 percent have been sold.

Deutsche Bank believes that buyers are taking a cautious approach amid fears over legal obstacles and financing of purchases.

The bank also believes that Abu Dhabi property sales have not benefited from an uptick in demand from expatriates - relying instead on traditional Emirati national buyers. But nationals in Abu Dhabi, according to the bank, seem less likely to buy in their own city, where they are entitled to government-sponsored housing, and typically invest in second homes in Dubai or outside the UAE.

Expatriates might buy more from Aldar Properties, but so far only two out of four major projects - Al Raha Beach and Yas Island - have been made available to non-Emiratis.

Deutsche Bank also points to more structural weakness in Abu Dhabi as a city. Although the oil industry is a massive employer of expatriates, there are few other boom industries. Dubai, in contrast, has attracted high earning executives to free zone developments such as Internet City, Media City and Jebel Ali.

Although Abu Dhabi's laws governing property ownership are now in line with Dubai's, Deutsche Bank suggests that there is still uncertainty among expatriates about the legal system. This, coupled with an immature mortgage market, is creating additional drag on the property sector, the bank concludes.

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READERS' COMMENTS

Abu Dhabi House sale....
Posted by Michael, Abu Dhabi, UAE on Monday 13 August 2007 at 17:00 UAE time


Also as far as I know Abu Dhabi does not offer the residence visa for the buyer.

Property laws
Posted by Jennifer, Dubai, UAE on Sunday 12 August 2007 at 09:00 UAE time


You state that Abu Dhabi's laws governing property ownership are now in line with Dubai's, however to my knowledge Abu Dhabi is offering 99 year leasehold as opposed to the "freehold" that is offered in Dubai. Has this changed?

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