Abu Dhabi’s real estate sector has nearly doubled over the past five years to record one of the highest growth rates in the domestic economy before it began to slow down in the aftermath of the 2008 global fiscal crisis.
Official data showed the sector’s contribution to GDP leaped from around Dh25.6 billion in 2005 to a record high of Dh53.4 billion in 2010. This boosted its share from about 5.3 to 9.8 per cent in the same period.
The sector, one of the largest real estate sectors in the Middle East, was also the second top beneficiary of foreign direct investment, receiving nearly Dh12.7 billion by the end of 2008, almost a quarter of total FDI flow into the emirate, showed the figures by the Abu Dhabi Department of Economic Development.
Fixed capital formation (total investment) in the sector also shot up from around Dh2.5 billion in 2005 to Dh17.4 billion in 2010, the report showed.
“The real estate sector has become one of the most important and promising sectors in the Emirate as it is directly associated with efforts to diversify the domestic economy,” the report said.
A breakdown showed investments recorded their highest increase in 2009, when they rocketed to around Dh16.4 billion from Dh6.1 billion in 2008.
The sector’s contribution to GDP recorded its highest rise in 2007 as it soared to nearly Dh40 billion from Dh31.6 billion in 2006.
Growth slowed down in 2009 and 2010 as the sector gained around Dhseven billion in both years following the global crisis and the 2009 regional debt default problem, which also stifled banking business and other sectors.