(MENAFN- Khaleej Times) Abu Dhabi's property firm Tasweek has forecast that the UAE realty sector will remain attractive in 2015 ignoring the global challenges.
In its market report for 2014, Tasweek Real Estate Development and Marketing says that residential activity continues to lead Abu Dhabi's property market while business in Dubai is enjoying higher consumer confidence. Overall, the realty sector sustained the growth momentum of the past three quarters and moved towards a strong finish for the year 2014.
"Positive microeconomic, regulatory environment and population growth" continued to drive real estate growth across the UAE, according to Tasweek's quarter four market findings.
The country's banks remain generally sound and profitable, although Tasweek cautions that the gross loans/deposit ratio is nearing 100 per cent, indicating more limited room for growth. The domestic population also remains on track. It reached around 9.9 million by the end of 2014 and is expected to hit 18.83 million in 2023 to further stretch market demand.
Government measures to curb speculative demand in real estate and better control credit growth have streamlined the industry.
"There are many factors pointing to the continued growth of real estate in the UAE in 2015 and beyond, including a surging population, a resilient economy with an overall inflation rate of less than 2 per cent, resurgent market confidence and stricter regulatory controls on the sector," the Tasweek report added.
Abu Dhabi market
Abu Dhabi's residential segment led the local market upsurge, supported by the reduction in supply as a measure for landlords to protect rent levels, the removal of the five per cent rental cap and the return of government employees residing in other parts of the country to the emirate in compliance with new housing policies.
Overall, rent prices rose five per cent in the mainland and three per cent in freehold areas located at the outskirts of Abu Dhabi.
For the last quarter of the year, the best studio deals were found on Muroor Road and Al Markaziyah areas at an average annual rate of Dh57,750. Muroor Road also offered the best 1-, 2-, 3- and 4-bedroom rates at Dh68,250, Dh84,000, Dh126,000 and Dh168,000 respectively.
As for villa rentals, the Al Reef gated community had the best prices for 3-, 4-, and 5-bedroom units at corresponding prices of Dh130,000, Dh160,000 and Dh180,000.
Al Reef also bested other areas in apartment and villa buy-side deals, posting an average price of Dh1,000 per square foot for apartments and Dh1.5 million, Dh2.1 million, Dh2.5 million and Dh3 million for 2-, 3-, 4- and 5-bedroom villas respectively.
Dubai market
The sales market continued to stabilise in Dubai in the fourth quarter of 2014. The observed slowdown in transactions is indicative of a growing market patience and confidence in the future.
On average, sales prices decreased by three per cent compared to the third quarter. Overall, the Dubai market has levelled off since quarter three of 2014, with the ongoing announcement of new projects not expected to have an immediate impact on supply, given the longer-phased nature of the developments.
The property advisory firm noted that government measures to better regulate mortgage financing and double Rera transfer fees had also helped cool down the market in the last quarter.
The company added that more buyers are expressing interest in Dubai's off-plan property options.
In line with Tasweek predictions at the start of 2014, the UAE's real estate market ended strong due to a vibrant economy, a surging population, sector-related government measures and global confidence in the country's property offerings.
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