Abu Dhabi’s deadline for 20,000 public sector workers to move to the emirate has passed, creating a new demand for upmarket housing.
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The United Arab Emirate state’s government decreed all public sector workers must live in the emirate rather than opt to commute from nearby Dubai.
Many opted to live in Dubai because of better housing and lifestyle standards.
The daily commute is around two-hours each way.
Local estate agents claim the demand for exclusive housing in neighbourhoods like Al Raha Beach has soared by 15% and is expected to rise even further.
“The rising demand has been triggered by new workers who have not bothered looking for a home in Dubai because of the decree and early birds who wanted to find the best accommodation ahead of the rush,” said a spokesman for estate agents Cluttons.
The Abu Dhabi government also has business and infrastructure projects in the pipeline which will boost employment and the economy – and trigger a further demand for accommodation.
The agents reckon the prices of luxury apartments are already 13.2% in the first half of the year, compared with an average rate of 7.3% across the city.
Villas have seen a 22% price rise in the first half of the year.
Meanwhile, in Dubai, rising rents and easier access to mortgages is pushing tenants into considering buying a home.
In the first half of the year, rents in Dubai soared by 11.2%, and for many renters, buying is becoming financially sensible.
“People do not want to keep paying higher rents and many are thinking about owning rather than renting,” said a Cluttons spokesman.
Interest rates have plunged in the emirate over the past four years – from an average 9% down to just 4.5%, making them easily affordable for many well-paid workers.
Banks are also offering incentives to borrow, like discount rates, cut-price administration fees and free valuations.
Property prices have increased as many an influx of investment flowed into the UAE, seen as a safe haven from the troubles of the Arab Spring rebellions due to the stable political and economic environments.
“Part of that investment is going into property as people do not want to buy a home in countries where there are troubles,” said the spokesman.
Buyers are looking for homes mainly around the Dubai Marina and Downtown Dubai neighbourhoods, although Business Bay is also attracting interest, explained the spokesman.
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