Cluttons’ report highlights gap in Abu Dhabi real estate
Lack of affordable housing in Abu Dhabi is a major opportunity for developers to fill the gap, according to real estate consultancy Cluttons.
The firm’s latest report, Abu Dhabi 2015/16 Winter Property Market Snapshot, points out that house prices has increased by 34% since 2010 and there is a clear need for affordable houses.
Edward Carnegy, head of Cluttons Abu Dhabi, said that the issue of affordability has been building for some time, initially following the introduction of the Federal Mortgage cap and doubling of property registration fees. “These had the desired effect of cooling the market, but now many people are forced to pay premium rents, limiting their ability to become owner occupiers in the long term. This presents a major opportunity for developers to deliver housing that is ‘genuinely affordable’, while still of a high quality, with the potential to offer flexible access to home ownership through models such as ‘rent-to-own’.”
Though new legislation on fixed quotas for affordable housing are being currently drafted, details are not yet confirmed.
Carnegy said another factor that is affecting the market is the drop in oil prices.”It continues to impact the rate of job creation in Abu Dhabi, which has filtered through to the residential market in the form of weakening demand leading to an unsurprising slowdown.”