24 February 2017

Dubai / Abu Dhabi: Game of Thrones

A price analysis of Dubai and Abu Dhabi, reveals that during the boom period in the second cycle, prices in the former appreciated twice as much as the latter. Equally, what is witnessed is that the recent price correction in Dubai has been greater than what has been witnessed in Abu Dhabi as well. However, a month on month price change signals that Dubai declines have tapered signaling a bottoming out, whereas, Abu Dhabi continues to fall.

A supply analysis of both the emirates reveals various differences. Firstly, Dubai supply of its housing stock is skewed towards the freehold areas, whereas the majority of units in Abu Dhabi are in leasehold areas.

Emaar and Aldar represent the flagship bellwether development companies in the freehold segment. Therefore it is unsurprising that thematically speaking, the strategies of both companies are starting to move towards the theme of mid income housing, even as the historical emphasis on creating iconic developments remains in focus.

This thematic shift underscores the latent demand for such product that is inherent in both cities. As the pace of development gathers pace, investor interest is expected to increase as the price and product range on offer widens in scope.

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