DUBAI - Bloomberg


Abu Dhabi residential rental prices will jump by as much as 25 percent this year on a shortage of housing and as the emirate's economic growth attracts new immigrants EFG-Hermes Holding SAE said.
Since “supply is not expected to catch up with demand over the next 18 to 24 months at least prices and rents will continue to rise in all the real estate segments” EFG analyst Sana Kapadia said in a statement posted on Dubai-based Web site Ame Info Saturday.
Residential rents will rise by as much as 20 percent in 2009 as government projects stimulate investor interest in Abu Dhabi though shortages of labor and materials for new buildings may threaten market stability the report said.
Abu Dhabi capital of the United Arab Emirates and owner of the world's fifth-biggest oil reserves is investing in tourism real estate aviation and energy-intensive manufacturing to create jobs that will diversify its economy.
Tourism projects include the $40 billion development of Yas Island which will host its inaugural Formula One race in 2009. The emirate also plans to build theme parks with companies including Time Warner Inc. and MGM Mirage. Low and middle income families in Abu Dhabi spent as much as half their salaries on rent as prices increased 17 percent in the first quarter the emirate's Department of Planning and Economy said in a report last month.