The Abu Dhabi Property Market
Abu Dhabi is the capital of the United Arab Emirates and is the largest of the countries’ seven cities located less than 200kilometres from Dubai. Abu Dhabi is actually richer and more powerful, boasting 10% of the world’s petroleum reserves and extremely rich Sovereign Wealth Funds.
Abu Dhabi is following in Dubai’s footsteps with plans to diversify the economy and move away from reliance on the energy sector. In September 2007 the government published Plan Abu Dhabi 2030 which outlines the city’s evolution over the next 20 years or so, with emphasis on developing the tourism, industrial and real estate sectores.
The city has already announced over US$270 billion in real estate projects, and in 2006 the doors were finally opened to international investors.
Future development is divided in a similar way to Dubai with distinct areas serving well defined residential and commercial purposes. Most of the future development will be in the outlying islands which surround the mainland, as well as more inland towards Dubai. These islands include Al Reem Island, Saadiyat Island, Al Raha Beach, Yas Island (future home of Formula One Grand Prix) and Hudyriat Island, among others.
The market is characterized by supply far exceeding demand causing extremely high rental prices/returns. The demand will continue due to the city’s expansion which is attracting people, businesses and events to the region.
At the time of writing, entry prices are much higher than Dubai at between 1,800 – 2,000 AED, but the payment plans are generally more favorable to compensate.
Abu Dhabi is still behind Dubai is some respects of the property sector. For example, there is no authority to regulate the market, not all developments are freehold, and residency visas are currently not granted to investors.
However, Abu Dhabi surely offers one of the most exciting property markets in the world, and is only in the infancy stage.
Tags: Abu Dhabi Business, Abu Dhabi Property, Abu Dhabi Travel