Abu Dhabi real estate market 'gains momentum'.

Byline: Abu Dhabi 

Abu Dhabi is seeing a steady flow of business owners and investors making their foray into the emirate's real estate market, inspite of the current recession-hit times, according to the head of a leading real estate services firm.

'Now is the perfect moment to invest in Abu Dhabi. There are definite signs of growth in terms of property prices and real estate investments, as can be seen in the fourth quarter of 2009; while the year 2010 is slated to be a year of stability, with new direction for the real estate sector,' stated Tej Kohli, founder, Ozone Holding group.

While the recession wreaked havoc elsewhere, it gave Abu Dhabi the advantage of incorporating its real estate governance and statutory frameworks, while also preserving evenness in the demand and supply strata of the market. Kohli holds great appreciation of Abu Dhabi's dedication towards assertively pursuing extensive infrastructure projects, in spite of the global economic slowdown. This, he believes, are important steps taken by the authorities to bolster international attraction and awareness on Abu Dhabi.

With the recent injection of much needed funds in its banks through capital notes the UAE government has helped bolster confidence in its investors and consumers alike.

'It is an excellent move by the Abu Dhabi Government to reassess its support to Abu Dhabi banks; these funds will certainly boost the financial sector and more importantly, build morale among investors,' Kohli said.

For the economy, the funds along with the confidence boost may help release credit origination, by being channelised to specific infrastructure projects whose completion would have been jeopardised by financing troubles.

'Acts such as these strongly support the emirate's banking economy; to endure untoward impacts of domestic and global calamity and be in a more dependable position than most other territorial peers. By ensuring that Abu Dhabi's financial establishments are well-benefitted, the move is destined to fortify the banking sector - a 'sine qua non' for restituting lost confidence and for firmly establishing economic activity through the support of credit expansion.'

The recent announcement on residency visas is yet another shot in the arm that will jumpstart market appreciation and long-term market stability in Dubai and the UAE, especially in the property division.

Kohli, however, is of the opinion that the market as a whole should have a blend of both low return/low risk affordable housing and high return/high risk niche sectors in the long run.

'It is imperative that developers centre upon sustainable living accommodations in a more panoptic view to keep development and cash revenue streams running even during future downspins. Niche segments need to be focused upon, as the emirate will always produce opportunities to serve the niche segment in a progressive economic rundown.'

As an investor with a long term perspective, Kohli is of the opinion that the reason why the Abu Dhabi property sector has been able to endure the downturn relatively well in the first half of 2009, was due to the fewer number of speculators in the market, coupled with high demand for rentable space in Abu Dhabi in general.

According to research reports on the emirate's property sector, a 15-52 per cent correction of property prices in Abu Dhabi after almost two years of rapid increase has forced out short-term speculators. The speculators who had driven the market to its euphoric heights have largely been flushed out, while inflated prices are touching realistic levels. This is a confidence booster for both investors and local buyers.

'Buyers with a longer term view and staying power are hopefully going to help stage the restoration of this very lucrative market.The stage is set for a strong comeback in the Abu Dhabi RE market somewhere by mid 2010,' he concluded.- TradeArabia News Service

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