As a total of 3,302 residential units were completed during the second quarter of 2012, a quarter-on-quarter rise of 17.3 percent, research from the Statistics Centre – Abu Dhabi revealed owners spent more on properties they planned to use as their main residence, compared to rental units bought for investment.
Latest data released by the Statistics Centre – Abu Dhabi (SCAD) said a total of 1,516 buildings were completed in the emirate of Abu Dhabi during the second quarter of 2012, of which 68 percent were in Abu Dhabi region, 9 percent in Al Ain and 23 percent in Al Gharbia region.
While the number of units built in the UAE capital rose 17.3 percent, compared to the first quarter of 2012, 75.5 percent of the buildings completed were intended for residential usage.
The SCAD research found the estimated average construction cost per sqm during the second quarter ranged between AED3013 (US$820) and AED3382 per metre, depending on the total floor area, the interior finishes and intended type of use.
The data showed that owners generally spent more on the units when they planned to use them for their own residence. Buildings with a total construction area of between 300-599 sqm had the highest construction cost of AED3382 per metre and were mostly dedicated for residential use by the landlord.
The residential rental sector is likely to get a boost in the later quarters of 2012 after news at the weekend that Abu Dhabi is pressing its public sector employees who reside outside the emirate to relocate within its borders.
“Employees residing outside the emirate will not be eligible for the housing allowance” provided to workers in state institutions, the government said in a circular dated September 12 and seen by Reuters.
The policy takes aim at people, believed to number many thousands, who commute to work in oil-rich Abu Dhabi while living in the neighbouring emirate of Dubai because of lower rents there or a lifestyle which they see as more comfortable.
The new rule, which will take effect after a year, will apply to citizens of the UAE as well as foreigners who are working in Abu Dhabi for the government and all its wholly owned entities and companies, the circular said.
It said employees should live in Abu Dhabi “to avoid traffic and road accidents”, an apparent reference to the risks of commuting on the 130km highway through the desert between Abu Dhabi and Dubai, which is packed with cars at rush hour.
However, analysts said the policy appeared designed to help absorb a large supply of new high-end homes that is set to enter the market in Abu Dhabi this year.
Property prices in the emirate have tumbled about 50 percent since the global financial crisis hit the market several years ago, analysts estimate, and the new supply threatens to undermine them further.
“Many new units have come up in Abu Dhabi, reaching the peak of its development cycle. The move is to create new demand and make sure the vacancy rates don’t reach high levels,” said Matthew Green, research head at consultants CBRE.