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Real estate in the United Arab Emirates has attracted numerous investors in recent years. This is especially true for Dubai, with its developed market with a high yield. But is it possible to invest profitably in real estate only in Dubai? No, it isn’t. There are at least three viable alternatives — Abu Dhabi, Ras Al Khaimah, and Sharjah. Their property markets have their own peculiarities.
Content:
- Abu Dhabi: freehold politics and 147% growth
- Abu Dhabi’s freehold-zones for villas and apartments
- Tourist emirate of Ras Al Khaimah
- Prospects of Ras Al Khaimah
- Sharjah: a comfortable conservative emirate
- Sharjah real estate
Abu Dhabi: freehold politics and 147% growth
The capital emirate of Abu Dhabi is the largest in the UAE. While Dubai boasts huge investment earnings, Abu Dhabi is considered the country’s political, cultural, commercial, industrial, and educational hub.
Abu Dhabi cannot compare with Dubai in the number of transactions and real estate diversity. However, the local market is growing very fast. Abu Dhabi made transactions for a record amount of AED 11.6 billion ($3.15 billion) in Q1 2023. This is 147% more than in the Q1 2022. This data was collected by the local Department of Municipalities and Transport (DMT).
Foreigners could purchase apartments in Dubai and Abu Dhabi only on a long-term lease. However, there are numerous freehold zones where they can buy local properties.
According to the DMT, the most popular freehold zones in 2022 were:
- the Yas island, with many amusement parks and shopping malls — real estate transactions here were made for AED 4.2 billion ($1.14 billion);
- the Al Reem island, which is built up with high–rise buildings — deals with local properties were concluded for AED 3.4 billion ($925 million);
- the Saadiyat island, a cultural hub with numerous museums and exhibitions — property transactions here were made for AED 3.1 billion ($844 million).
There are a lot of freehold zones in Abu Dhabi. Their prices are lower than in Dubai but not much. The fact is that local developers do not implement so many real estate projects. Any new one is in the spotlight and is quickly sold out. Moreover, this high demand also makes the prices for these properties go up.
Abu Dhabi’s freehold-zones for villas and apartments
Market analysts note that there was a high demand in early 2023 for affordable luxury villas in Dubai and Abu Dhabi. So, several developers announced various projects for a total of 5,900 houses. The most sought-after freehold zones to purchase villas are the Al Reef district, and the Saadiyat and Yas islands.
Abu Dhabi has not built as many apartment buildings as Dubai. There are many development projects in Dubai. The most popular freehold zones to buy apartments are the Al Raha beach, the Al Reem Island, and the Al Reef district.
It can be noticed that most of the freehold zones in Abu Dhabi have the word "island" or "beach" in their name. Most of them are located by the sea because the city is located on several islands.
Analysts agree that the Abu Dhabi property market will continue to grow throughout 2023. Having recovered after the three-year pandemic, it is becoming increasingly popular, and many freehold zones attract investors from all over the world.
Tourist emirate of Ras Al Khaimah
If Dubai attracts investors, Ras Al Khaimah is considered a popular tourist destination. This emirate boasts picturesque mountains and a mild climate.
Tourism is the main direction of Ras Al Khaimah's development. It is not just about nature and beaches. One of the largest local projects is the Wynn Resorts casino on the artificial islands of Al Marjan. Moreover, there will be five-star hotels and a dozen restaurants on the islands.
The population of Ras Al Khaimah is much smaller than in Abu Dhabi and Dubai — about 250,000 people. That is why the local residential real estate market is not as developed.
Prospects of Ras Al Khaimah
According to the Ras Al Khaimah Statistics Centre (RAK Statistics Centre), real estate transactions totalling AED 7.3 billion ($1.9 billion) were made here in 2022. Deals for AED 1.02 billion ($277 million) were concluded in Q1 2023. This compares to Q1 2022 — AED 1.17 billion ($318 million).
As in Abu Dhabi, there are freehold zones here too. Experts say that real estate in the coastal part of the emirate is in the greatest demand. Al Hamra Village, the Mina Al Arab district, the Al Marjan Island, and the Rotana Cove resort are the most popular freehold zones in the coastal area.
Ras Al Khaimah is likely to see strong economic growth in the coming years. In November 2022, the UAE government adopted UAE Tourism Strategy 2031. According to this strategy, the country should become one of the world’s major tourist destinations. To make it happen, the tourism industry will get additional investments of AED 100 billion ($27 billion). UAE hotels should receive 40 million tourists by 2031. Being the main tourist "pearl" of the UAE, Ras Al Khaimah will become the most developed area. Of course, the emirate’s growth will affect the local property market.
Sharjah: a comfortable conservative emirate
Sharjah is the UAE’s artistic and cultural hub. It is home to many of the country’s largest museums and theatres. However, Sharjah’s laws are conservative. For example, if you can easily buy alcohol in Ras Al Khaimah, you cannot do it in Sharjah.
Despite its conservatism, Sharjah has something to offer, because it was the most developed emirate after Abu Dhabi. The infrastructure is advanced here — from schools and hospitals to large shopping and entertainment centres. Its convenient road network makes it possible to get to downtown Dubai in 15–20 minutes. In addition, Sharjah is the main seaport of the UAE, and many goods here are much cheaper than in Dubai and Abu Dhabi.
Sharjah real estate
Foreign citizens could only count on renting housing for many years. However, Arada, the largest local developer, received in November 2022 permission from the Sharjah Real Estate Registration Department to sell housing on the freehold principle. Moreover, anyone who had purchased the housing of this developer for a 99-year lease could become its owners provided the Real Estate Registration Department approved.
In December 2022, Sharjah’s government allowed foreigners to own properties. This rule applies only to newly developed areas. Generally speaking, the government has announced that this emirate will be home to numerous freehold zones.
However, there is only one area where foreign nationals can own housing. It is the Sokoon residential area, where they can purchase 1-, 2-, and 3-bedroom apartments. Their prices start at AED 548,000 ($147,000), and they are sold out very quickly.
Summing up, it can be noted that each emirate has its own unique features. Meanwhile, each of them may become as popular as Dubai in the future. After all, the UAE does not lack investments, and these three emirates are increasingly opening up to overseas investments.
