A detailed guide on how to invest in real estate in Abu Dhabi in 2024
According to a report by Abu Dhabi authorities, the total number of real estate transactions increased by over 90% in 2023. In this post, we’ll explore why investors are increasingly focusing on the UAE capital and how profitable it can be to buy property here.
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Why Abu Dhabi real estate is an attractive investment
In 2019, foreign nationals gained the right to fully own property in Abu Dhabi, sparking a surge in investor interest. According to the Abu Dhabi Statistics Centre, in Q1 2023, the development sector accounted for 52,8% of the total GDP, reaching its highest level in 8 years. Property prices are also on the rise, with a 2,8% increase in the first half of 2023 compared to the previous year. On average, prices have been growing by about 8% annually, aligning with the emirate’s Vision 2030 strategy.
It's worth noting that Abu Dhabi's real estate market is still in its early stages, with many sectors less developed than in Dubai. For example, short-term rentals are less common in the capital, despite growing tourist numbers each year – this lower competition offers additional opportunities for investors.
Dubai vs. Abu Dhabi: Where to invest?
Abu Dhabi offers a lower cost per square meter: according to Global Property Guide, the average price is around $3,100, compared to $4,800 in Dubai. Additionally, property taxes in Abu Dhabi are half as much – 2% compared to 4% – which can lead to significant savings.
However, if you're looking to obtain residency through investment, Dubai might be an easier option. In Abu Dhabi, you can't get a 2-year visa for a property purchase of $205,000; only the golden visa program is available, granting 10-year residency for investments starting at $545,000.
Advantages of investing in Abu Dhabi real estate
High profitability
By purchasing an apartment in Abu Dhabi, you can earn 6-8% annually through long-term rentals or boost your income to 10-15% with short-term leases. Flipping properties could bring up to 30% profit with the right investment choice. Considering the growing global interest in the emirate and the steady rise in property prices, you can expect increased returns over the next 3-5 years.
High tourist influx
In 2022, more than 18 million tourists visited Abu Dhabi, and the government plans to increase these numbers annually. Visitors are drawn to cultural landmarks like the Louvre Abu Dhabi, Qasr Al Hosn Fort, Sheikh Zayed Grand Mosque, beach resorts, and high-profile events such as Formula 1 Grand Prix, UFC tournaments, and concerts by top artists.
Educational hub
Living in Abu Dhabi offers access to top-quality education for your children, with five major universities and over 60 international schools offering American, British, Indian, French, and Russian curricula.
In 2023, Abu Dhabi University ranked in the top 300 of the Times Higher Education World University Rankings, offering undergraduate, graduate, and doctoral programs in art, law, business and management, engineering, humanities, natural sciences and exact sciences.
Environment and safety
Abu Dhabi has been recognized as the safest city in the world for six consecutive years since 2017, according to the Numbeo Index, which evaluated 329 cities. The emirate is free from street crime, hotel theft, and other offenses, ensuring safety at all hours.
Despite being surrounded by the Rub' al Khali desert, sand and dust storm impacts are quickly mitigated. The emirate's Environment Agency constantly monitors air pollution and enforces measures to minimize the environmental impact from construction and industrial activities. Moreover, Abu Dhabi's central beach annually receives the Blue Flag award from the Foundation for Environmental Education. According to Knight Frank, the capital leads the world in the number of properties certified by international and national environmental standards.
Foreigners’ rights to purchase property in the UAE
In the UAE, there are two forms of property ownership: freehold and leasehold. Leasehold allows for long-term leases of up to 99 years, with the right to live in and rent out the property, while freehold grants full ownership. You can purchase an apartment or villa with full private ownership rights in 17 freehold zones, including Masdar City, Al Reef, Saadiyat Island, Yas Island, Al Raha Beach, Reem Island, Al Maryah Island, and Al Shamkha.
Potential challenges and issues
Abu Dhabi is considered more conservative than Dubai. Tolerance for things that might be common in other cultures is lower here – this includes public appearances, attire, and displays of affection between men and women. Additionally, appearing in public while intoxicated is strongly discouraged. Violations of public order can lead to fines, and in some cases, imprisonment or deportation with a ban on re-entry.
It’s also important to remember that obtaining UAE citizenship is extremely difficult, requiring over 30 years of residency. However, by maintaining your investment, you can renew your residency and enjoy the benefits of being a resident, such as tax optimization and the ability to conduct business in the Emirates.
Property costs: What to expect and factors that influence prices
As mentioned earlier, property in Abu Dhabi is generally cheaper than in Dubai, but there are still premium properties that can cost $10,000,000 or more. Prices depend on location, ownership type, proximity to the coast, view, finish, and the class of the residential complex. Investment properties in popular tourist areas start at $230,000, while in the suburbs, such as the eco-friendly Masdar City, you can buy a studio starting at $180,000.
How to make the right choice when buying property
Start by defining your investment strategy. If you're planning to rent out the property on a short-term basis, consider studios or one-bedroom apartments in tourist areas like Yas Island. For tourists, the view, transport accessibility, and proximity to beaches and attractions are more important than the complex’s infrastructure. For long-term rentals, you might consider larger units, such as 2-3 bedroom family residences in Al Shamkha or Al Reem.
If you're looking to profit from reselling the property, consider not only the location and size but also the developer’s offers. Some developers’ installment plans can save you money and maximize profitability.
If you're unfamiliar with the emirate's real estate market and the specifics of buying property here, it’s wise to consult professional brokers. A specialist can help you find the perfect option based on your budget and investment strategy.
Quick guide: Steps to buying property
- Choose the right property.
- Sign a preliminary agreement.
- Sign a Memorandum of Understanding and pay a deposit of 10-15% of the property price.
- Obtain a No Objection Certificate from the developer.
- Pay the land tax of 2% of the property value.
- Register the property ownership with the Abu Dhabi Land Department.
Documents required for property purchase:
- passport with a valid visa;
- proof of residence – hotel or apartment address;
- receipt of registration fee payment for the Land Department;
- Emirates ID, if applicable.
Promising real estate options in Abu Dhabi
Manarat Living II
Manarat Living IIis a 12-story building located in the Cultural District on Saadiyat Island. Choose from cozy studios or 1-3 bedroom apartments with natural finishes available in light or dark tones. All units are equipped with energy-efficient lighting and water conservation systems.
The complex offers everything you need for a comfortable lifestyle: take a refreshing dip in the azure swimming pool, work out in the modern gym, enjoy a friendly ping-pong match in the game hub, or catch the latest movie in the private cinema.
Price: Starting at $215,000
Completion date: Q1 2027
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Sea La Vie
Sea La Vie is a residential complex consisting of four 18-story towers connected by a shared podium, located on the coast of Yas Island. The architectural concept of Sea La Vie is inspired by the shades of the ocean, with the buildings' flowing geometry resembling ocean waves and glass panels reflecting the colors of the water and sky depending on the weather and time of day. You can choose from 1-4 bedroom apartments, a one-bedroom duplex loft, a two-bedroom duplex, or a three-bedroom townhouse. All units come with a light-colored finish.
Right outside the complex is a picturesque promenade where you can enjoy a colorful sunrise over Al Raha Creek during your morning jog or take a leisurely evening stroll with family and friends, followed by dinner at one of the cozy restaurants.
Price: Starting at $430,000
Completion date: Q1 2026
Conclusion
Looking to buy an apartment in Dubai for living or investment? We’re here to help. Just visit our homepage to explore dozens of current listings on the Dubai real estate market. Request a callback below, and our experts will find the best options for you and guide you through all the legal details – with love and without any commission.
