This comes not a moment too soon as residential housing has seen dramatic increases in rent prices over the past two years due to a shortage. This has even caused some property owners to divide villas into several units to accommodate multiple families. The first round of increases in the number of housing units is expected to occur in 2009 with local developers Aldar Properties, Sorouh Real Estate and Tamouh Investments planning to release some of their respective projects at that time. However, many of the new developments are anticipated to have a high price point, making them unavailable to parts of the population, especially single-income families.
At the same time, housing prices in Abu Dhabi may still be undervalued. According to a report from HSBC Global Research, property prices in the emirate are still low compared to the per capita GDP of nearly $45,000 last year. More restrictive property regulations and a new mortgage market have kept residential prices down. For example, only since late 2005 has owning and selling land between Abu Dhabi nationals become legal while in neighbouring Dubai such trading has been allowed for over 10 years.
According to the study, if Abu Dhabi closes the regulatory gap with Dubai, housing prices will jump from around $3000 to nearly $5000 per sq metre by 2010. The study said that, "for the current level of GDP per capita, relative to other global cities, housing prices in Abu Dhabi should stand at around $9385 per sq metre." To prevent sudden increases in housing prices, the government of Abu Dhabi has put in place a 7% annual cap on increasing rental prices.
In September the Urban Planning Council introduced Plan Abu Dhabi 2030 to help deal with population growth in the capital for the next 23 years and outlines how Abu Dhabi will accommodate this through sustainable development.
The plan anticipates new developments will meet the future needs of the city's residents while preserving the surrounding environment and the cultural heritage of the emirate. The government will also put in place a public transport system that integrates buses, light rail and a high-speed rail to help reduce congestion and the negative environmental impacts of private transport during this period.
According to United Nations statistics, the United Arab Emirates (UAE) ranks 43rd in the list of the world's largest polluters. In a recent interview with local media, Mohammad Saeed Al Kindi, minister of environment and water, said the UAE is working to raise the federal benchmark for laws and regulations governing environmental protection. Through environmental guidelines set in the plan for 2030, and clean energy initiatives such as the Masdar Initiative that was introduced last year to focus on renewable and sustainable energy technologies, Abu Dhabi is taking the lead in raising awareness throughout the UAE as the emirates try to balance growing requirements of development with its responsibility to nature.
Abu Dhabi has quickly become a modern metropolis since the first urban developments started in the 1960s. As the UAE prepares to celebrate its 36th birthday next week, the capital is positioned to become a global centre for business, tourism and entertainment. Through careful planning and the government's commitment to the environment, the citizens of Abu Dhabi are set to enjoy a standard of living comparable to only a handful of cities in the world.