Properties In Abu Dhabi

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The impact of the falling cost of money on properties in Abu Dhabi was deliberated recently at the Abu Dhabi Real Estate and Investments Show. It was highlighted that as interest rates fall there would be a corresponding increase in investments in properties in Abu Dhabi. Price trends of properties in Abu Dhabi today are in favour of investors.

The organizers of the Abu Dhabi Real Estate and Investments Show reported over $400 m in combined sales of properties in Abu Dhabi during the event. This figure reflects the keen investor interest in properties in Abu Dhabi. In fact some industry players insist that fairly quickly, properties in Abu Dhabi will be on par with those in Dubai.

The Emirate has only recently opened its doors to foreign investment, and properties in Abu Dhabi are largely sold off-plan. The supply-demand equation is greatly in favour of the seller, which in turn exerts considerable pressure on prices of properties in Abu Dhabi. Moreover, the recent reductions in US interest rates have impacted properties in Abu Dhabi sharply. The dirham is pegged to the US dollar. With the dollar rate falling rapidly and continuing Federal Reserve interest rate cuts, cash strapped Emiratis are moving their funds in to properties in Abu Dhabi. HSBC, in a report predicts that prices of properties in Abu Dhabi could jump as much 25% in 2008.

Many may brush this current trend as a one off for properties in Abu Dhabi. However the fundamentals for real estate in Abu Dhabi remain strong. It is after all one of the richest cities in the world. The government has also been very pragmatic, focusing on broad-based economic planning aimed at reducing dependence oil and gas related revenues. In its overall plans, the government has identified real estate as one of its key thrust sectors.