Abu Dhabi realty sector ready to face global crisis
The real estate sector in Abu Dhabi is solid and there is gradual and limited fall in demand, said experts.
The experts were yesterday taking part in the first session of the Abu Dhabi Economic Forum that concentrated on the impact of the financial crisis on Abu Dhabi's real estate sector.
Gurjit Singh, Chief Property Development Officer, Sorouh, said: "We are in need for strategies for recovery. There are serious efforts to limit the problem of low number of loans given by banks. Monetary flow and facilities should continue. There will be certainly a structural change in the demand for properties in Abu Dhabi. But the best thing is that speculators have disappeared from the market.
"Most projects being executed by top property developers have not stopped and neither have any of Sorouh's projects. In addition, we have not laid off employees and carry out currently re-structuring and re-distribution of manpower. In the past, the majority of Abu Dhabi's companies concentrated on luxury accommodation, but now they are focussing on accommodation that is suitable for medium-income category or the category that has the strongest presence in the emirate."
Dr Hani Shamma, Chief Executive Officer, Bloom, said: "The number of free zones where foreigners have the right for ownership should increase. Abu Dhabi has a lot of land and investors should be given residence visas to be sure their money is safe. Besides, it is necessary to quickly issue legislations regulating the real estate sector.
"The UAE's real estate sector depended 90 per cent on speculations. But the speculations disappeared following the international financial crisis and the demand for properties fell. It is important that the government does not respond to falling demand and withdraw its support for top property developments. It should increase spending on infrastructure projects and take advantage of low cost of projects and provide healthy environment."
Blair Hagkull, Managing Director, Jones Lang Lassale, said there is an imbalance between demand and supply in the real estate sector in the Gulf. He added the prices and rents at the regional level will decline during the current period by 30 per cent to 50 per cent.
"But the situation in Abu Dhabi will be different, as the demand is still big. Abu Dhabi needs longer time than the remaining Gulf countries to achieve balance between the demand and supply, because it has huge projects being executed in the meantime and liquidity is available and its economy is prosperous.
"The year 2009 will be transitional at the world level, while 2010 will be the year of stability. It is important to pump investments in the real estate sector in the meantime, as the cost of projects is lower than before.
"Abu Dhabi will weather the financial crisis for many reasons. The most prominent of which is government intervention to support liquidity and control loans," Hagkull said.
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