Reem Island sees most property deals in Abu Dhabi in first half

Government releases real estate transactions data for the first time as part of emirate's efforts to introduce open data culture and boost transparency

Foggy morning on Reem Island December.23/17- (Courtesy Carla Karim)
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Reem Island recorded the most real estate transactions in Abu Dhabi in the first half of 2019, according to official statistics released for the first time as part of a government initiative to boost transparency and provide the private sector with more data for decision making.

Abu Dhabi's real estate sector overall saw 10,000 transactions in the first six months of this year worth Dh31 billion. With deals totalling Dh4.37bn, Reem Island topped the volume of transactions in the capital, according to a report by the Department of Urban Planning and Municipalities (DPM).

"This is the first government report on this topic and the aim is to increase the level of transparency and disclosure," Majed Ahmed Al Jaberi, acting executive director of real estate sector at DPM, told reporters on Sunday.

The report follows the government's commitment to an "open data" initiative, which aims to offer more transparency to businesses, giving them access to government-collected information. Boosting transparency for investors and businesses alike is part of a nine-point policy programme under the Ghadan 21 initiative, which was announced by Sheikh Mohamed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, in 2018.

The open data programme will enable potential investors and businesses to ask the Abu Dhabi Data Authority for information held by various government entities to help them make informed decisions and create an “open data culture”.

The debut real estate transactions report has compiled data on the value and volume of transactions for plots of land and real estate units spread across different areas of the emirate as well as the number of mortgage deals done in the reporting period.

The DPM is studying the addition of more data categories in its upcoming reports, based on feedback from industry stakeholders.

The report aims to provide official information that, as well as helping  buyers, sellers, developers and brokers make informed decisions, will raise confidence in the market, Mr Al Jaberi said.

In terms of locations with the most sales activity, Reem Island was followed by Al Reef with transactions worth Dh1.78bn and Yas Island with Dh1.59bn worth of deals. Abu Dhabi's real estate sector saw a total of 6,374 property sales worth Dh12.5bn, while the number of mortgages in the emirate reached 3,712 with a total value of Dh18.5bn.

The DPM declined to provide comparative figures for the 2018 period.
"Mortgages [value] is higher than sales, an indication of confidence in the [property] sector," Mr Al Jaberi said.

Aldar, Abu Dhabi's biggest-listed property developer, said the new report "reflects their [DPM's] unwavering commitment to transparency and will undoubtedly contribute to enhancing investor confidence".

Government reforms and initiatives, such as the Ghadan 21 and a new land freehold law, are "already impacting the economy and enhancing Abu Dhabi’s reputation as an attractive destination to live, work and invest", said Talal Al Dhiyebi, chief executive of Aldar, adding that the developer expects the momentum of sustained sales growth to continue in the coming months.

Earlier this year, Abu Dhabi for the first time allowed foreigners freehold ownership of properties in designatedfree zones as it seeks to attract foreign direct investment into its real estate market. The new freehold regulation replaces the lease-hold law.

"We will start to see investors we have not seen before, which is the aim of the [new] law . We will start to get investors, newcomers to the market, who are interested in freehold," Mr Al Jaberi said.

"We can't say whether there will be a rise or not [in real estate transactions] but we have a lot of queries on our market and the laws from people who are newcomers."

The UAE property consultancy in a separate report on Sunday echoed the findings of the DPM data, saying prime areas such as Al Reem Island, Yas Island and Saadiyat Island were the firm favourites for sales in the first half of 2019.

Affordable suburbs such as Mohamed bin Zayed City, Khalifa City A and Al Muroor take the lead for rental deals in Abu Dhabi, according to the report.

Property advisory firm JLL said in its first quarter market report in April that conditions in Abu Dhabi remained subdued but that an uplift in sentiment was expected on the back of Ghadan 21 reforms. Rental and sales prices fell in the first three months of this year amid falling transaction volumes, JLL said.