Why investing in Abu Dhabi real estate market is profitable – a review for 2022

Review of the main driving forces behind the economic appeal of Abu Dhabi, popular areas among property buyers, tips for investing.

The United Arab Emirates offers many prospects and advantages to foreign investors. Traditionally, Dubai has been the most sought-after destination for expats, but during the past few years, the emirate of Abu Dhabi has also been gaining popularity with investors from all over the world. The local real estate market offers a wide range of residential and commercial properties both in budget-friendly and premium segments. For your investment to pay off, it's important to understand the smallest nuances of this type of investment. Below we will tell you how to choose an investment property and accurately assess the profitability of your assets.

Choosing a Trustworthy Developer

Lately, Abu Dhabi has been competing with Dubai in terms of being the leading real estate destination, as it has witnessed an overwhelming demand among foreign and local buyers. In fact, as revealed by the data from the Department of Municipalities and Transport, a total of 3,304 transactions were recorded in the UAE capital, reaching a whopping value of AED 11.3B (USD 3B) in Q1 2022. This emirate is highly attractive in terms of real estate investment, thanks to the beneficial visa residency system and business-friendly environment. Below we will review the main driving forces behind the economic appeal of Abu Dhabi, popular areas among property buyers, tips for investing and much more.

Why Choose Abu Dhabi Real Estate Market?

Metropolitan Capital Real Estate witnessed a strong demand for off-plan and completed real estate, with an impressive 50% surge in the number of international buyers in the first 4 months of this year (2022), compared to the same period in 2021. It is worth noting that almost 90% of the purchasers opted to relocate to the emirate with their families.

According to the data revealed by Metropolitan Capital Real Estate, investors mainly come from Western Europe, in particular, Germany, Austria, France and Italy. There was also an increase in the number of registered buyers from the CIS and Australia.

Evgeny Ratskevich, CEO of Metropolitan Capital Real Estate, said the Abu Dhabi property market has been historically driven by residents, with up to 80% of property purchase deals sealed by Emirati citizens or residents. Nevertheless, as a result of the leading position of Abu Dhabi in global safety rankings and its sustainable economy, the city is growing popular both among families and business professionals.

Abu Dhabi's free zones, including Masdar, KIZAD, Abu Dhabi Global Market (ADGM), twofour54 and Industrial City of Abu Dhabi (ICAD) also play an important role in promoting Abu Dhabi as a leading real estate investment destination. That being said, twofour54 is located in Yas Creative Hub on Yas Island, and is the engine of the gaming and entertainment sectors in the region.

Furthermore, Abu Dhabi has a wide array of premium properties, from cozy compact apartments to ultra-refined palatial mansions, which all sell out quickly after their launches. This is attributed to the availability of unique resorts, award-winning theme parks, cultural attractions and well-established academic institutions.

NBD! The emirate recently saw the release of Louvre Abu Dhabi Residences by Aldar Properties, which is the world's first Louvre Abu Dhabi-branded development, in which all units were snapped up within days after the presentation.

On top of that, the Abu Dhabi Residents Office, which is an entity of Abu Dhabi Department of Economic Development (ADDED), signed a strategic agreement with Aldar Properties PJSC in October 2022. To be more specific, the Abu Dhabi Residents Office will provide full support to customers of the real estate giant when applying for a Golden Visa via a property investment worth at least AED 2M (USD 545K).

In addition, thanks to the agreement, residents with Golden Visas in Abu Dhabi obtain a 2% discount when acquiring select real estate directly from Aldar Properties and exclusive priority registration at specific Aldar Academy-affiliated schools. Not forgetting, there is also an opportunity to take advantage of Darna, which was launched by Aldar and is a first-of-its-kind, entirely digital loyalty programme in the UAE.

Tips for Investing

When investing in real estate, one has to research thoroughly the current and upcoming market trends, as well as the potential of the area among renters and tourists. That being said, investors are recommended to look 3–4 years ahead and analyze the increase of the ROI in the long term and the fluctuations in the property value. You need to be able to identify which neighbourhoods in Abu Dhabi had major crops in the capital value and check out which location offers the best rental yields. It is also important to calculate your budget accurately, taking all fees and taxes into account.

NBD! You can consider taking out a loan, as the UAE banks have the capacity to cover up to 80% of the total property cost for foreigners. Some of the most lucrative offers are available in HSBC, Mashreq and The Commercial Bank of Dubai.

About ROI

The Abu Dhabi real estate market is thriving, as it offers an impressive ROI as high as 10–11%. Some of the most attractive areas in terms of yields are Al Reef – 7.75%, Al Reem Island – 6.48% and Masdar City – 6.98%, according to Bayut & dubizzle.

When calculating ROI, you have to remember the following factors:

  • The total price of the property
  • Overall rental income and periods when there might be no tenants
  • General upkeep costs
  • Property tax and insurance
  • Monthly expenses, like mortgage payments

Popular Areas

Yas Island, Al Saadiyat Island, Al Reem Island, Khalifa City and Al Raha Beach are the best-selling locations in the capital, accounting for 80% of Metropolitan Capital Real Estate sales, as revealed by Evgeny Ratskevich. Below you will find the key features of each area:

Yas Island is located close to the Abu Dhabi – Dubai highway and is home to some of the world's most unique attractions. These include Ferrari World, SeaWorld, Warner Bros. Abu Dhabi and many more. The island also has an abundance of lush golf courses, shopping outlets, restaurants, schools, fancy hotels and entertainment venues.

The Saadiyat Island development is home to the Abu Dhabi Cultural District, as it contains a collection of stunning museums, inlcuding Louvre Abu Dhabi, Guggenheim Abu Dhabi, Zayed National Museum, Natural History Museum Abu Dhabi and teamLab Phenomena. Not forgetting Saadiyat Beach Golf Club, which is the region's first ocean course, offering the opportunity to watch dolphins in the Arabian Gulf.

Al Reem Island is a natural island, which is connected to Abu Dhabi by bridges. There is one of the most gorgeous architectural masterpieces in the emirate – the Gate Towers. Al Reem Island also features Sorbonne University Abu Dhabi, which is the first French higher-education institution to open in the Gulf, and is the university's first international campus.

Khalifa City is situated on the Abu Dhabi mainland just off the highway to Dubai. Properties here are mainly represented by premium villas and villa compounds. Popular among families with children, this neighbourhood is brimming with landscaped parks, where lush lawns, sports courts and children's play areas are located. It is famed for Al Forsan International Sports Resort and the Abu Dhabi Golf Club, among other leisure options.

Al Raha Beach is a neighbourhood located in Al Raha, developed by Aldar Properties. Nestled on the beach along the highway to Dubai, it is adjacent to Abu Dhabi International Airport, Khalifa City and Yas Island. It consists of 3 upscale sub-communities called Al Bandar, Al Muneera and Al Zeina. Among its amenities are a swimming pool, a gym, a sauna, a children's play area and more.

About Metropolitan Capital Real Estate

Our real estate agency; Metropolitan Capital Real Estate is part of the award-winning Metropolitan Group, which was founded back in 2008. Our highly-qualified brokers will gladly help you to select the most lucrative property options based on your budget and purpose. We will hold all interaction with a potential seller to agree on the best price and the most beneficial terms, in addition to handling all the necessary paperwork and registering the property ownership in the respective government agencies. If required, we will help you to take out a loan with a lucrative interest rate in some of the most respected financial institutions in Abu Dhabi. After having purchased a property, you could also consider using our property management services, which will help you to enjoy a passive income without having to actually become a landlord.