Leaders from the Abu Dhabi Real Estate industry gathered in the capital to discuss the impact of new supply and regulatory reform at the Cityscape Connect Business Breakfast in Abu Dhabi.

The property market in Abu Dhabi continues to be defined by a shortage of good quality options in both commercial and residential units. However the downward trend of rents is signaling a shift in this balance despite the levels of interest improving in recent months. A number of significant regulatory and legal changes have signalled positive steps that should assist future recovery.

The key talking points at the meeting discussed included: Whether there was sufficient supply to attract international investors to invest in the capital, the potential arrival of additional legislation to support the legal framework already in place and the impact that new supply would have on the Real Estate market.

Legal expert Matthew Hooton, partner in Ashurst Abu Dhabi, said: “There is a legal framework in place in Abu Dhabi to deal with Real Estate and that framework will hopefully be shortly augmented by additional legislation dealing with Strata title, Escrow, brokerage and mortgage law. That’s a step in the right direction.”

Hooton said at the Cityscape Abu Dhabi Conference held this past April, the municipality indicated they hoped additional legislation would be brought in by the end of the year.

Mansoor Ahmed, senior strategy and planning manager, Manazel Real Estate, talked about the impact and implications new property would have on the market. He said at present, commuters making the journey from Dubai to the capital were probably spending somewhere in the region of AED 25 – 30,000 per year taking into account fuel and car maintenance charges. If car depreciation charges were also taken into account that figures would go upto AED45,000.

“I think that more availability of lower cost units in Abu Dhabi will see people coming back, although it may take a year or so,” he said.

“The delivery of an estimated 5-6,000 new units will start in September this year – the first thing that will happen is people paying high rents in Abu Dhabi will leave their old expensive apartments for cheaper ones.” He said gradually, commuters from Dubai would be next.

“Once cheaper units in Abu Dhabi come on the market, it makes more sense for people to move back,” he said.

He also added that for international investors interested in investing in the capital, there wasn’t much in the way of assets available for purchase.

“If international institutional investors are coming to Abu Dhabi, they don’t buy one or two units they want to buy whole buildings. There is a lot of supply of commercial estates but only three towers available that can be purchased by international institutional investors, such as the Sky and Prestige Towers. Other commercial property on the market isn’t available for these types of investors.”

He added that in order to attract these investors, it was essential to have a clear legal framework relating to ownership of property for foreign investors.

Cityscape Connect is an initiative of Cityscape, the real estate event brand that has achieved international recognition and success. Cityscape events are held in Abu Dhabi, Riyadh and Jeddah in Saudi Arabia, Shanghai and Latin America.  Cityscape events attract key industry figures such as international investors, property developers, governmental and development authorities, leading architects, designers, consultants and senior professionals involved in the property industry.

For more details about the next upcoming Cityscape event – Cityscape Global in Dubai - please visit www.cityscapeglobal.com