ID :
22863
Mon, 10/06/2008 - 14:50
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Shortlink :
https://oananews.org//node/22863
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Abu Dhabi set to face shortage of 28,000 residential units in 2008 : ADCCI
Abu Dhabi, Oct 6, 2008 (WAM) - Abu Dhabi is set to see a deficit of nearly 28,000 residential units in 2008 and under-construction buildings coming to market will only meet 20 per cent of demand in the current year while demand for units could jump to about 70,000 by 2010, a report by Abu Dhabi Chamber of Commerce and Industry (ADCCI) predicts.
''The shortfall in supply of residential units has pushed rents to new heights.....rents account for up to 40 per cent of consumer spending, spurring inflation to highest rates..... The housing crisis is projected to gain more momentum as gross demand for units will rise to 70,000 by 2010,'' the report adds.
''The increasing shortage in supply of residential units for low-income persons and remedy of the rents problem need a clear-crystal, strategic vision which envisages a long-term housing plan, which invites greater role by the private sector if the growing demand for properties is to be met,'' the report affirms.
The report,'' Rents Crisis and Future Expectations in the Emirate of Abu Dhabi'', Abu Dhabi has a mix of dynamic factors which makes it a fertile ground for luring foreign investment. The dramatic transformation in the economy of Abu Dhabi has contributed to the marked increase in demand for properties, a development has, in turn, given proportionate rise to prices of units. Other factors like high cost of construction and heightened prices of building materials have also played their part in producing the housing crisis which weighed positively on landlords and negatively on many economic sectors.
According to the report, the residential units in 2005 which estimated at 287,000 were quite enough to cater for the market demand but the slack in construction activities in 2006 created a shortage of around 3,000 units, a problem which developed into a crisis in 2007 when the deficit shot up to 13,000 units.
The crisis swept into 2008, getting more severe when majority of units came on stream were luxury properties (villas and hotel apartments) designed for a selective high-income segment. Unfortunately, the low-medium income groups are still the most hit by the high rents.
The report warns that surging rents could produce negative socio-economic ills which would weigh heavily on the macro economy, inflow of investment and costs of production and investment.
The report acknowledges the true vital role the private sector can play in resolving the crisis by supplying the real estate market with demand.
The report calls for redressing the housing crisis within the overall vision of fighting inflation, introducing a benchmark for setting rents as per location, chalking a supply-demand growth strategy and building residential communities for low and medium income segments.
The report stresses the urgent need for enacting laws and legislations to regulate the real estate market and increase of rents.
''The shortfall in supply of residential units has pushed rents to new heights.....rents account for up to 40 per cent of consumer spending, spurring inflation to highest rates..... The housing crisis is projected to gain more momentum as gross demand for units will rise to 70,000 by 2010,'' the report adds.
''The increasing shortage in supply of residential units for low-income persons and remedy of the rents problem need a clear-crystal, strategic vision which envisages a long-term housing plan, which invites greater role by the private sector if the growing demand for properties is to be met,'' the report affirms.
The report,'' Rents Crisis and Future Expectations in the Emirate of Abu Dhabi'', Abu Dhabi has a mix of dynamic factors which makes it a fertile ground for luring foreign investment. The dramatic transformation in the economy of Abu Dhabi has contributed to the marked increase in demand for properties, a development has, in turn, given proportionate rise to prices of units. Other factors like high cost of construction and heightened prices of building materials have also played their part in producing the housing crisis which weighed positively on landlords and negatively on many economic sectors.
According to the report, the residential units in 2005 which estimated at 287,000 were quite enough to cater for the market demand but the slack in construction activities in 2006 created a shortage of around 3,000 units, a problem which developed into a crisis in 2007 when the deficit shot up to 13,000 units.
The crisis swept into 2008, getting more severe when majority of units came on stream were luxury properties (villas and hotel apartments) designed for a selective high-income segment. Unfortunately, the low-medium income groups are still the most hit by the high rents.
The report warns that surging rents could produce negative socio-economic ills which would weigh heavily on the macro economy, inflow of investment and costs of production and investment.
The report acknowledges the true vital role the private sector can play in resolving the crisis by supplying the real estate market with demand.
The report calls for redressing the housing crisis within the overall vision of fighting inflation, introducing a benchmark for setting rents as per location, chalking a supply-demand growth strategy and building residential communities for low and medium income segments.
The report stresses the urgent need for enacting laws and legislations to regulate the real estate market and increase of rents.
