Realty a key component of Abu Dhabi economy
Value of property transactions hits Dh31B in first half of 2019 through 10,000 transactions, growth rate 4.6%
Real estate is one of the important sectors in Abu Dhabi’s economy in terms of contribution to the GDP and FDI, top officials said in the capital.
Rashed Al Beloushi, under-secretary at the Abu Dhabi Department of Economic Development, said the real estate sector, which has seen high annual growth rates, is important part of the UAE’s vision to diversify economy away from oil.
“There are many non-oil sectors we rely on like manufacturing, renewable energy, aerospace, banking and finance, information and communication technology, tourism and real estate. Over the past five years, we have experienced average growth rate of 4.6 per cent in Abu Dhabi,” Al Beloushi said during his keynote speech at the recent International Real Estate and Investment Show in Abu Dhabi.
“The value of real estate transactions amounted to Dh31 billion in the first half of 2019, through 10,000 transactions. There were 6,374 registered sales transactions worth Dh12.5 billion, and 3,712 mortgage transactions worth Dh18.5 billion.”
Reflecting on last year’s performance, he pointed out that real estate and construction, with an output of Dh114.4 billion, contributed 14.4 per cent of Abu Dhabi’s GDP by the end of 2018.
“The portion of real estate in non-oil GDP is 28.2 per cent. FDI in real estate and construction accounted for Dh36 billion, which is 34.4 per cent of total stock of foreign direct investment in Abu Dhabi by the end of 2018.”
Meanwhile, Majed Ahmed Al Jaberi, acting executive director for the real estate sector at the Department of Urban Planning and Municipalities, said the show was a platform to exchange experiences and build strong partnerships with all the stakeholders.
“Our strategy is to raise awareness about strengths of the real estate sector. We are here to provide essential information for investors, real estate developers and landowners. We are aiming to reach out to our stakeholders and advance the transparency of Abu Dhabi’s real estate’s business environment,” he added.
Buffett’s agency coming soon
Meanwhile, legendary investor Warren Buffett’s real estate brokerage services is expanding in the UAE with a new office set to open in Abu Dhabi within six months.
Despite concerns of oversupply and slowdown, Berkshire Hathaway HomeServices Gulf Properties CEO Phil Sheridan felt there is ‘great value’ in investing in Dubai and Abu Dhabi. He counted the government’s booster doses like fee waiver, deferred payment plans, tax structures, visa norms, favourable pricing, robust infrastructure and attractions – all aspects that added value to the UAE market.
“What our leadership team in the US identified was that the UAE is a destination of real value. As the Global Real Estate Bubble Index recently published illustrated that Dubai and, indeed, Abu Dhabi offer good value,” Sheridan said at the International Real Estate and Investment Show.
Berkshire Hathaway HomeServices has more than 1,400 offices and 50,000 agents in the US. Its first office in the Middle East was opened in Dubai earlier in May. Sheridan noted the firm will see ‘accelerated growth’ throughout the region in coming years. “We are committed to opening a branch in Abu Dhabi within the next six months. We want to make Abu Dhabi as much a success as we have already enjoyed in Dubai where we have 40 agents with 15 support staff. And that’s good in first six months. We will have a celebratory launch on January 31.”
Sheridan pointed out that Berkshire Hathaway’s Class A shares have averaged an annual growth of 19 per cent to shareholders since 1965 compared to 9.7 per cent from the S&P 500. “If you had invested $7,100 in June of 1990, on October 2019, it will be $311,640,” he added.