ABU DHABI, Dec 20 (Reuters) - Abu Dhabi has set up an
authority to develop mass housing as it pushes ahead with social
welfare initiatives, in a move that could spur restructuring of
the emirate's real estate sector.
The Abu Dhabi Housing Authority was established by United
Arab Emirates President and Abu Dhabi ruler Sheikh Khalifa bin
Zayed al-Nahayan, state news agency WAM said late on Wednesday.
It will develop housing programmes, outline rules and
regulations for housing and create a database of applicants for
loans, plots of land and low-cost houses, making review of
applications easier.
Sheikh Hazza bin Zayed al-Nahayan, national security advisor
and brother of the ruler, will chair the body, which will report
to the Abu Dhabi Executive Council but have financial and
administrative independence, WAM reported.
Abu Dhabi has boosted welfare spending for its citizens over
the last couple of years, partly to avert any social discontent
during Arab Spring uprisings elsewhere in the Middle East.
A property analyst at an Abu Dhabi-based bank, who declined
to be named because of the sensitivity of the issue, said the
housing authority could help the government restructure the
residential real estate sector, which has been hit in the last
few years by oversupply and a steep fall of prices.
One major plank of the restructuring is a planned
state-backed merger between Abu Dhabi's two biggest real estate
developers, Aldar Properties and Sorouh Real Estate Co
. The merger talks were originally announced in March
but a final agreement has not yet been reached, apparently
because of disagreements over valuations.
The merger could help to support Abu Dhabi real estate
prices by cutting back excess new supply and permitting better
coordination of projects.
"The new housing authority is a further consolidation of the
real estate sector and helps to put all the pillars together,"
the analyst said. "It is positive for Aldar and Sorouh, who can
expect more contracts to develop housing."
Before the property crash many developers focused on
high-end residential projects, but with the developments that it
sponsors, the government has been shifting the industry's focus
towards middle- and lower-income housing.
(Editing by Andrew Torchia)