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Tale of two cities

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Abu Dhabi Week spoke with Almer Agmyren, the managing director of Rex Real Estate, to find out how the capital’s property market is stacking up compared to neighbouring Dubai

The number of real estate transactions recently in both Abu Dhabi and Dubai shows a great confidence in the UAE property market for the foreseeable future.

A lot of the buyers in Abu Dhabi fall into the category of end-users with access to financing who are not looking to immediately re-sell, while buyers in Dubai are investors and cash buyers.

Confidence, especially in Abu Dhabi, has been growing as evidenced by a rise in the number of transactions on Saadiyat Island, Reem Island and Al Raha Beach as many of the developments have reached completion and established a sense of community with the addition of restaurants, cafes, supermarkets and new schools, parks and beaches in the immediate vicinity.

Saadiyat is a natural island with pristine beaches and great care has been taken by the developers (TDIC) in terms of the landscaping, which complements their residential offerings, hotels and golf clubs. Saadiyat is set to host the New York University campus and Cranleigh School, both opening this year, and Louvre Abu Dhabi, opening in 2015. All of these, as well as future developments still to come, are slowly shaping up to make Saadiyat a global cultural, educational and luxury lifestyle destination.

The investors in Dubai are from a wider array of countries and there are also many more private developers here compared to Abu Dhabi. While some projects were postponed definitely or indefinitely during the recession, many new projects are currently being planned and launched. With Dubai having been endorsed to host the Dubai Expo 2020, the world’s fair, it added further confidence to the investors and developers to put their money into the Dubai market.

Abu Dhabi has had a more balanced growth, with consolidations amongst the developers, recently Aldar and Sorouh, which bode well for the future. The majority of the developers in Abu Dhabi are also partly owned by or have strong links to the government, therefore planning and execution will become much easier to oversee, according to Abu Dhabi 2030 vision, the blueprint for the development of the capital.

As Etihad Airways, Abu Dhabi Tourism & Culture Authority and other important sectors continue to grow and more tourists are driven to Abu Dhabi to discover its appeal, some like what they see in terms of growth and activity in infrastructure, schools, leisure activities and nature and will also end up buying in Abu Dhabi.

Whilst people used to opt to live in Dubai, this is no longer the case as the prices have increased more than Abu Dhabi and the quality and choice in Abu Dhabi is on par with Dubai or any international city. Therefore, for families with children, Abu Dhabi offers a great quality of life with great schooling options and leisure activities and increasingly more so for individuals on their career path who see Abu Dhabi as a safe and secure environment that offers a great lifestyle along with great job opportunities.

With the recent mortgage cap removal and transfer increase introduced to cool down the real estate market, the property prices in UAE are likely to increase more in the near future. The rents are creeping up again and buying thus becomes a better option when you compare rents to mortgage payments in addition to the confidence in the delivery and quality of the projects and the real estate market. As we move on, it is an indication that the UAE property market in both Abu Dhabi and Dubai is healthy and thriving, thus that investors see the UAE as the preferred investment destination in the region.

In the immediate future, the overall correlation between the two cities will continue to be strong and prices will be growing very much in tandem.

Our contributor: Almer Agmyren, Managing Director, Rex Real Estate

 

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