Abu Dhabi house sales fall short of Dubai's

A study by Deutsche Bank has found that the property market in Abu Dhabi has failed to ignite in the way Dubai did following relaxation of foreign ownership laws.Mohammad Khan, a research analyst at the bank, said that compared to the pace of property sales in Dubai, Abu Dhabi developers appear to be experiencing "a more cautious buyer pool."His research was based on a study of residential units being sold by Aldar Properties, the largest developer in Abu Dhabi. He found that of 5,000 residential units that have gone on sale since 2005, only 60 percent have been sold.

Deutsche Bank believes that buyers are taking a cautious approach amid fears over legal obstacles and financing of purchases.The bank also believes that Abu Dhabi property sales have not benefited from an uptick in demand from expatriates - relying instead on traditional Emirati national buyers. But nationals in Abu Dhabi, according to the bank, seem less likely to buy in their own city, where they are entitled to government-sponsored housing, and typically invest in second homes in Dubai or outside the UAE. Expatriates might buy more from Aldar Properties, but so far only tow out of four major projects - Al Raha Beach and Yas Island - have been made available to non-Emiratis. Deutsche Bank also points to more structural weakness in Abu Dhabi as a city. Although the oil industry is a massive employer of expatriates, there are few other boom industries.

Dubai, in contrast, has attracted high earning executives to free zone developments such as Internet City, Media City and Jebel Ali. Although Abu Dhabi's laws governing property ownership are now in line with Dubai's, Deutsche Bank suggests that there is still uncertainty among expatriates about the legal system. This, coupled with an immature mortgage market, is creating additional drag on the property sector, the bank concludes. Source