Over the past few years the real estate market in Abu Dhabi has been actively developing, and as a result, today the capital attracts a large number of foreign investors. According to the Department of Municipalities and Transport of the Emirate, in just the first quarter of 2022 in the UAE capital a total of 3,304 deals worth approximately AED 11.3 billion (USD 3.1 billion) were registered. These are purchases/sales of buildings (including mortgages) and land.
As reported by the Department's quarterly report, there were 1,722 real estate purchases/sales worth AED 4.35 billion (USD 1.2 billion) and 1,582 mortgage loans worth AED 6.9 billion (USD 1.9 billion) in the emirate. In this article, we will take a look at the defining features of the most popular neighbourhoods in terms of property transactions.
Overview of Popular Areas for Buying Real Estate
Foreigners who want to buy property in Abu Dhabi have to understand the features and specifics of the local market. In particular, the purchase of a residence by expats is possible only within the specially designated freehold areas within the capital.
Another prerequisite for a real estate transaction deal is to use an experienced broker – real estate agent, or a lawyer who will prepare all the necessary documents for the purchase.
NB! When buying a residence in Abu Dhabi you do not need to pay any land or property taxes, with the exception of the registration fee (Title Deed) when doing the transfer of ownership.
Properties in Abu Dhabi are a lucrative investment option not only for long-term residence, but also for renting. Emirate's residential communities are equipped with modern amenities, from gyms and swimming pools, to parks and recreational areas. The return on investment in local developments is estimated between 5–8% per annum.
Yas Island is the largest artificial island in Abu Dhabi with a colossal area of over 2,500 hectares, and is an important tourist and entertainment center within the emirate. That being said, the island houses about 105,000 ft of landscaped beaches, Sea World Abu Dhabi, Yas Waterworld with 43 water rides, Yas Marina with numerous restaurants and stores, Yas Bay Waterfront and much more.
The developer of Yas Island is Aldar Properties. In addition to first-class entertainment infrastructure, the AED 132B (USD 36B) island has an impressive number of luxury residential communities, which are in extremely high demand from investors. The total value of Yas Island real estate transactions for Q1 2022 was AED 1.2B (USD 329M). Return on investment in local residences is estimated at 6.2% and it is possible to purchase an apartment on the island for an average of AED 920K (USD 250K).
Saadiyat Island is a man-made island of 290.6 million sq. ft, located about a 5-minute drive away from the center of Abu Dhabi. The island is a highly important tourist and cultural area of the emirate. In fact, this destination is famed for its upscale beaches with all sorts of entertainment, a variety of retail stores, unparalleled residential communities such as Louvre Abu Dhabi Residences, and several world-class museums including Louvre Abu Dhabi, Zayed National Museum and Guggenheim Abu Dhabi.
Saadiyat Island has both finished projects and off-plan properties, giving potential investors plenty of options to choose from. In the first quarter of this year, the value of real estate sold on the island reached AED 673M (USD 183M). The average cost of apartments for purchase on Saadiyat Island is currently AED 2.2M (USD 599K). At the same time, the return on investment in the area is estimated at 7.3%, which is just one of the advantages of buying a residence in this area.
Al Reem Island
Al Reem Island is a natural island located about 1,968 ft away from the coast of the emirate. It is also one of the fastest developing residential and tourist projects in the capital. The island is home to several residential areas with predominantly premium real estate, landscaped beaches and all the necessary infrastructure, including restaurants, retail stores and leisure facilities. On top of that, Al Reem Island has several kindergartens and prestigious world-class schools, a designated medical clinic and the Shams Boutique Mall. As of Q3 2022, the population of the island is about 20,000 people. According to the master plan, after the completion of the development, Al Reem Island will have the capacity to accommodate 210,000 inhabitants.
Real estate options in this area include studios, luxury apartments, penthouses and premium villas overlooking the coast. The total value of transactions concluded on the island in the first quarter of this year is estimated to be around AED 598M (USD 164M). At the same time, the yield from renting out local residences in this area is 8.7%. The average selling price of apartments on the island is AED 850K (USD 231K).
Khalifa City is a suburban area located about 72,178 ft away from the mainland of Abu Dhabi. Developed by Aldar Properties, this area features a total of 2,000 luxury 4 and 6-bedroom villas, with more than 800 units that are ready to move into. There is also a limited collection of apartments available to rent. The total number of properties sold within the first 3 months of 2022 in the area amounted to an estimated AED 173M (USD 47M) The rental yield from buying local residences in Khalifa City is between 5.7–6%. Purchasing a villa in this area will cost you an average of AED 6M (USD 1.6M) on average.
According to the master developer, Khalifa City should become an autonomous community with its own schools, retail stores, restaurants, entertainment venues and other necessary infrastructure. Due to the convenient location of the area, residents will be able to travel to Dubai within an hour.
Al Raha Beach
Al Raha Beach is the coastal area of Abu Dhabi, covering an area of 55.9 million sq. ft. This district adjoins the aforementioned Khalifa City and is yet another major project by Aldar Properties. According to the master plan, the area will have a landscaped sandy beach, gardens, parks, various social and recreational facilities, and more than 3,000 real estate units. Once completed, Al Raha Beach will be able to accommodate up to 120,000 people.
It is a developed self-sufficient neighbourhood with its own schools, clinics, restaurants and entertainment venues. This year Al Raha Beach became the fifth most popular residential community among Abu Dhabi real estate investors, with a return on investment rate of 5.6%. The total value of real estate transactions made in Al Raha Beach is AED 168M (USD 46M), while the average market price of residences in the area is AED 1.2M (USD 327K).
How Can We Help You?
Our brokers at Metropolitan Capital Real Estate will help you find the best options for buying property in Abu Dhabi. That being said, Metropolitan's agents will handle any issues regarding the agreement with the owner, preparing all the documents, offer and advise on legal support, and the maintenance of the residence. Investors interested in passive income opportunities can also take advantage of our property management service.