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Ongoing slowdown in realty means a minor correction

Abu Dhabi - "The market experienced a major upswing from 2013 to 2014, led by the residential sales market, with prime residential prices growing at 25 per cent per annum."

The current slowdown in the UAE real estate market should be seen as a minor correction as opposed to a major crash, according to a Middle East property expert.
David Dudley, International Director at JLL Mena, said that while the impact of reduced oil prices on the economy will lead to a short-term slowdown in demand, this is occurring at a time of minimal supply completions leading to relatively stable market conditions.
"The market experienced a major upswing from 2013 to 2014, led by the residential sales market, with prime residential prices growing at 25 per cent per annum. This pace of growth was unsustainable," he said. "The current phase is a slow-down and a relatively minor correction, rather than a major crash - with reduced supply coming through at a time of weak demand, allowing underlying dynamics to catch up with the pace of value growth." Speaking ahead of his participation in the Abu Dhabi Market Overview, which runs on the opening day of Cityscape Abu Dhabi, Dudley believes the current shift is a sign of the real estate market maturing and that opportunities still exist for real estate development and investment focusing on end-user demand.
Cityscape Abu Dhabi will mark its 10th anniversary this year when it returns to the Abu Dhabi National Exhibition Centre from 12-14 April. The UAE capital's largest property showcase gathers local, regional and international exhibitors and high profile speakers, amid a shift in the global real estate market.
Dudley added: "While liquidity has tightened, funding is still available for project finance and corporate level lending - it is just more selective. The good news is that demand growth continues from projects that started when oil prices were strong. Developments such as the airport expansion or the growth of Etihad Airline have an economic multiplier effect, ensuring continued GDP growth, albeit at a reduced pace."
The 10th edition of Cityscape Abu Dhabi is expected to draw interest from investors, developers, government authorities and key decision makers overseeing both public and private real estate developments.
Wouter Molman, director of Cityscape Group at Informa Exhibitions, the organisers of Cityscape Abu Dhabi, said: "The current market dynamics will prompt exhibitors and industry leaders to debate alternative approaches to their investment strategies."
- haseeb@khaleejtimes.com