Since 2015 the Abu Dhabi Real Estate Market has had a tough time. The fall in the price of oil meant that, unlike the rest of the world who are now in their ninth year of recovery from the 2008 crash, we had a serious “double-dip”. The resulting government spending cutbacks, benefits reductions and job losses in 2016 lead to vacancies across the board and sales and rental prices dropped. 2017 was more of the same as companies consolidated and more fat was trimmed. The effect on the real estate market has been that as of now, in mid-2018 we are in the same place (in terms of rents and sales prices) as the bottom of the market in 2012 (according to Reidin).
Abu Dhabi’s problem (unlike Dubai’s) isn’t supply, it is demand. Abu Dhabi supply has been very low over the last three years (1-2% per year) and won’t go much above 4% per year through to 2021 (according to Asteco). A sustained growth in the economy and jobs will quickly mop up excess supply and get us back on track, the only question is when? There are glimmers of hope for the near future:
- ADNOC is Back – For so long the biggest driver of the Abu Dhabi Economy ADNOC took a deep breath in 2016, merging units and shedding jobs. Just recently however it has pledged to spend Dh400 Billion over the next five years here, it is about to turn Ruwais into the world’s largest refining and petrochemicals complex site at a cost of Dh165 Billion here and it is investing Dh70 Billion into a natural gas project here. There is a very good article on ADNOC now and in the future here.
- Other Abu Dhabi Companies are Back – Mubadala has now merged with both IPIC and ADIC to form one of the largest funds in the world and even some of the companies who struggled most during the last few years like Taqa are moving forward as mentioned here.
- Infrastructure is Back – The long postponed phase two of the Etihad Rail project is creaking back into life here and there is even talk of the Metro project being restarted here.
- Growth is Back – The IMF states that in 2017 Abu Dhabi’s economy grew by a poultry 0.3% but it has predicted a 100% increase in 2018 to 3.2% here.
- Jobs are Back – The general job market is set to improve greatly in 2018 according to Hayes here, and vacancies rose 25% across the Middle East generally according to Robert Walters here.
Crompton Partners is the largest Property Agency in Abu Dhabi and we would be happy to talk to you about anything regarding sales or leasing in the Nation’s Great Capital. Please feel free to call me on 050 6145199 or email at ben.crompton@cpestateagents.com.
