Abu Dhabi’s property market is showing signs of steady growth, as the oil rich capital of the United Arab Emirates recovers from the deep blows of the coronavirus pandemic.
“Business in Abu Dhabi and the real estate sector is actually very buoyant,” Aldar Properties Chief Financial and Sustainability Officer Greg Fewer told CNBC’s “Capital Connection” on Wednesday.
“We’ve just come off a strong second quarter where we announced growth across all our major business lines,” Fewer said.
“We’re on pace to exceed 5 billion dirhams ($1.36 billion) in sales this year, driven by new launches that we’re going to be bringing in the third and fourth quarters.”
The latest comments signal a further improvement in the UAE’s economy and its often crisis fraught real estate sector. Pandemic related job losses forced nearly 10% of the UAE’s expat population to leave, hitting property prices and increasing vacancies last year.
But low lending rates and improving business conditions in the UAE have helped to stoke demand for Aldar’s major community and housing development projects in Abu Dhabi, where it is the developer of choice for the Abu Dhabi government.
Total sales topped 3.4 billion dirhams in the first half of the year, and the recovery has helped to push its shares up 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 nearly $9 billion.
Residential sales prices in Abu Dhabi had fallen on average by 2% in 2020, while prices in Dubai, where a supply glut has weighed on prices for more than half a decade, fell by 7.1%, according to Knight Frank. Price falls were largely concentrated in the apartments segment of the market, but demand for larger villas in both cities held up.
But Dubai’s largest developer, Emaar Properties, saw its sales surge to a record $2.65 billion in the second quarter of this year, while Damac Properties saw losses narrow. Shares of both have risen 42% and 33%, respectively, in the past 12 months.
“Our customer bases are expanding,” Fewer said. “70% of our recent launches have gone to new customers and a lot of them are tenants who are converting the ownership,” he added, suggesting people were upgrading to bigger homes and villas to accommodate the rise in remote work and learning.
Expatriate homeowners and foreign investors made up more than 40% of Aldar’s buyers in the second quarter.
A high national vaccination rate, improving mobility trends and government reforms to company ownership rules, paired with more flexible residency visas have also helped to improve sentiment within the sector broadly.