An Emirati woman paddles in a canoe along the skyscrapers of Abu Dhabi, United Arab Emirates, Wednesday, October 2, 2019.
Christophe Brochet | Bloomberg | Getty Images
Abu Dhabi’s real estate market is showing signs of steady growth, as the oil-rich capital of the United Arab Emirates recovers from the hard knocks of the coronavirus pandemic.
“Business in Abu Dhabi and the real estate sector is actually very dynamic,” Aldar Properties’ chief financial and sustainability officer Greg Fewer told CNBC’s “Capital Connection” on Wednesday.
“We just completed a strong second quarter where we reported growth across all of our major lines of business,” said Fewer.
“We are on the way to exceeding 5 billion dirhams ($ 1.36 billion) in turnover this year, driven by the new launches that we will achieve in the third and fourth quarters.”
The latest comments point to further improvement in the UAE’s economy and its often-struggling real estate sector. Job losses linked to the pandemic forced nearly 10% of the UAE’s expatriate population to leave, lowering house prices and increasing vacancies last year.
But low lending rates and improving business conditions in the UAE have helped fuel demand for Aldar’s major community and residential development projects in Abu Dhabi, where it is the developer of choice for the government of Abu Dhabi. ‘Abu Dhabi.
Total sales topped 3.4 billion dirhams in the first half of the year, and the recovery has seen its shares climb more than 100% in the past 12 months. Aldar Properties is now the largest listed developer in the United Arab Emirates with a market value of almost $ 9 billion.
Residential selling prices in Abu Dhabi had fallen by an average of 2% in 2020, while prices in Dubai, where a glut of supply has weighed on prices for more than half a decade, fell by 7, 1%, according to Knight Frank. The price declines were largely concentrated in the apartment segment of the market, but demand for larger villas in both cities continued.
But Dubai’s biggest developer, Emaar Properties, saw sales hit a record $ 2.65 billion in the second quarter of this year, while Damac Properties saw its losses shrink. Shares of the two have risen 42% and 33%, respectively, over the past 12 months.
“Our customer bases are expanding,” said Fewer. “70% of our recent launches have gone to new customers and a lot of them are renters converting the property,” he added, suggesting people were improving in larger homes and villas. to adapt to the increase in work and distance learning.
Expatriate owners and foreign investors made up over 40% of Aldar buyers in the second quarter.
A high national vaccination rate, improved mobility trends and government reforms to business ownership rules, coupled with more flexible residency visas, have also helped improve sentiment in the sector as a whole.