First half of 2015 sees real estate market strong in Abu Dhabi, slowing in Dubai

Abu Dhabi’s real estate sector saw a calm and consistent rise is rental and trading values in the first half of 2015, with the market in Dubai losing some steam while still outperforming many industry expectations for the period.

Dubai’s property sales values were 5 to 10 percent lower than over the first half of 2014, according to the latest market report from the United Arab Emirates (UAE). The slower real estate growth may indicate Dubai is a maturing market that is now more capable of righting itself by avoiding extremes. Some analysts predicted a gloomy situation for Dubai’s market; and though growth has indeed slowed, the size of the market is consistently increasing.

That’s due to continued investor trust in the Emirate’s ability to bounce back, and to its rising status as one of the most important business and leisure hubs east of Africa. More optimistic observers see Dubai’s slowdown as necessary growing pains that are part of the market’s diversification process, which will see a stronger Dubai in the future.

Abu Dhabi, however, faced no such concerns and continued to grow while introducing new regulations that are expected to strengthen the market’s appeal for investors.

The first half of 2015 recorded continued growth in the rental and hospitality sectors in Abu Dhabi while residential sales, and the retail and office sectors remained stable.

Lower oil prices were expected to decrease government spending, which could have slowed down the pace of demand growth. Government spending didn’t slow, and residential rental growth continued around 11 percent.

In order to address tenant interests, the Abu Dhabi Department of Municipal Affairs is planning to unveil a provisional rent index by the end of the year. It would aim to keep remove rent caps and keep rental escalations in check.

Numbers from the first half of 2015 indicate the real estate market in the UAE is showing signs of moving beyond the oil wealth that sparked the region’s meteoric economic growth.