UAE: Abu Dhabi Real Estate

Recent regulatory changes are giving an added boost to Abu Dhabi’s real estate market, which appears on track to a recovery. While there has been some speculation that the new rules could help fuel a property bubble, these concerns are likely unfounded given the recent pickup in the rate of handovers.

With a rule requiring Abu Dhabi government employees to live within the emirate set to come into effect in September, demand for residential real estate is expected to climb. However, certain segments of the market – particularly at the low end – remain soft.

The real estate market in Abu Dhabi is continuing to undergo a period of correction, with prices flat, slower demand and more supply expected to come to market in 2012. But while the market is expected to remain subdued in the near future, new real estate laws anticipated in 2012 could improve the situation in the longer term.

Economic expansion and upcoming real estate regulations look set to help Abu Dhabi’s property market, where lower investor demand and an increase in residential and office supply have combined to encourage a drop in rental rates.

Abu Dhabi's real estate sector is moving away from a situation of limited supply and high rental prices to one of improving quality and lower costs, which over time could tempt some commuters living in Dubai toward the capital.