How profitable is it to invest in property in Abu Dhabi in 2024?

Foreign property is attractive to investors and the UAE stands out as one of the top countries where foreigners prefer to buy property. Until April 2019, foreign nationals were unable to own property in the UAE capital. However, changes introduced by the government have allowed expatriates to become full owners in freehold areas. These measures have significantly boosted investment activity in Abu Dhabi. Presently, the emirate competes successfully with Dubai in this area and shows significant potential for further growth. Let's explore why it's worth investing in Abu Dhabi real estate.

Content:

• 5 reasons to invest
• Tourist influx fuels interest in property
• Market conditions
• Return on investment
• Ongoing projects remain the most profitable
• Conclusion

5 reasons to invest

1. Diversity of properties, ranging from beachfront villas to modern apartments.
2. The city's strategic location at the crossroads of three continents ensures access to global markets and business opportunities.
3. The property market is poised for sustained growth in 2024, with property prices expected to rise by up to 5%.
4. Government policies ensure transparency in transactions and protection of investor interests.
5. The "Golden Visa" programme allows investors to obtain the local equivalent of residency for real estate investments worth AED 2 million (USD 544,500).

Under these circumstances, investing in houses and apartments in Abu Dhabi is no less profitable than investing in property in Dubai. Moreover, the capital offers housing at more affordable prices.

Tourist influx fuels interest in property

The city's growing popularity among tourists can be attributed to its unique resorts, theme parks, cultural attractions and a variety of entertainment options. Key attractions include the Louvre Abu Dhabi, a branch of the legendary Parisian Museum, the Mangrove National Park, the Sheikh Zayed Grand Mosque and entertainment parks such as SeaWorld and Ferrari World.

The emirate is actively constructing new attractions, such as the Guggenheim Museum and the Zayed National Museum, which will further enhance its appeal to tourists. With the growing interest in the capital, the demand for rental properties is increasing, enabling investors to generate a stable income.

Market conditions

Abu Dhabi is becoming increasingly attractive to foreign homebuyers. In the first half of 2023, foreign investment in the emirate's real estate sector increased by 363% compared to the same period last year.

Buyers from Western Europe, including Germany, Austria, France and Italy, have been the most active. Investors from the CIS countries and Australia have also shown significant interest. The diversity of interested buyers underlines the attractiveness of the capital's market as a reliable investment destination amid global economic instability.

Prices in the emirate continue to rise. The highest price growth rates are observed for housing in the Saadiyat Island community. In 2023, the cost of high-end apartments here rose by 8.73%, while houses increased by 12.9%.

Return on investment

In the budget housing sector, the highest return on investment is in the Al Reef area, reaching 8.04% per annum. Slightly lower, the Masdar City community offers a return of 7.31%, while the Al Ghadeer community ranks third with 7.14%.

In the luxury property sector, the Al Reem Island community ranks first in terms of profitability, with a return on investment of 6.65%. Slightly lower, residential properties on Yas Island offer a return of 6.52%, while Al Raha Beach completes the top three with an annual return of 5.46%.

Currently, price growth in the capital does not reach the level of villas and apartments in Dubai, but a positive trend is noticeable. In this context, buying property in the emirate's capital offers investors the opportunity to increase their income potential and diversify their assets.

Ongoing projects remain the most profitable

The number of property transactions for apartments and houses under construction in the emirate has increased significantly: from 2,734 in 2021 to 5,095 in 2022 and 10,000 in 2023. Simultaneously, the number of projects under construction has also risen. Based on this trend, we can confidently predict that the volume of transactions will continue to grow in 2024.

Investing in off-plan projects is profitable for several reasons:

• New projects offer contemporary design and modern amenities;
• Developer prices are often more favourable due to discounts and special offers;
• Developers may cover some of the costs and offer flexible payment plans;
• The newness of the properties eliminates repair costs.

Thanks to these factors, investors have every reason to expect a high return on their investment. They can purchase apartments or villas at a more attractive price during the construction phase and sell them after completion for a profit of up to 30%.

Conclusion

Abu Dhabi's real estate market is experiencing sustained growth and offers attractive opportunities for investors. The capital of the UAE is actively developing, with new complexes and attractions emerging. There are ready-made houses and apartments in new developments. The latter can be considered the most cost-effective investment due to flexible payment schedules. The city is an ideal choice for those seeking a property investment with a stable long-term income.