Emirate will allow only 3,500 homes to be built in next 18 to 24 months
Abu Dhabi will limit construction projects over the next 18 to 24 months. The idea to protect the city’s real estate market from the housing glut and plummeting property prices seen in fellow emirate Dubai. Under the plan Abu Dhabi will allow only 3,500 homes and 140,000m² of commercial space to be built during the period. This is despite the fact Abu Dhabi has a housing unit shortage of 15,000 to 20,000.
The building restriction has been incorporated into the Abu Dhabi’s 2030 Plan. Although, in the short-run, imposing limits upon construction could lead to a rise in house prices and rents, the move is hoped to level the balance between supply and demand.
In an interview with Bloomberg, John Bullough, Aldar Properties chief executive, says the government planned to let the “rope out on development in a measured way.”
Abu Dhabi, whose market was bolstered by low interest rates after having opened its property market to foreign investors in 2005, suffered a fall in house prices in the wake of a worldwide financial crisis.
According to Matthew Green, head of UAE research at CB Richard Ellis, on average, house prices have fallen by 33% in the city since the third-quarter of 2008.
Many of Abu Dhabi’s construction projects which had been put on hold in their early stages of development are now being redesigned for low-income buyers.