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The real estate market of the United Arab Emirates (UAE) has a fairly interesting situation – the largest emirate is overshadowed by a small but dynamic neighbour- Abu Dhabi, with the largest area and revenue in the UAE. The names of these emirates and their capitals coincide, and the vast majority of real estate and business activity of the emirate is concentrated in the capitals. So, when speaking about a specific emirate, we mean its capital.
The seven emirates making up the UAE distribute their influence depending on their oil and gas reserves. Abu Dhabi cannot be competed with – its area is over 80% of the entire country, and its oil production provides over 70% of the total GDP. It has the seat of government as the president lives here, and the city is the political and financial hub of the UAE. Nevertheless, the words "real estate in Dubai" mean far more to those who are interested in buying a house abroad than the similar words -"real estate in Abu Dhabi". One of the important reasons for this imbalance is the significant delay in making a less noticeable, but important decision. In Dubai, the permission for foreigners to acquire full ownership of real estate indefinitely (in the so-called freehold zones) was finalised in 2006. This spurred the emirate’s dynamical real estate market. However, the capital emirate of Abu Dhabi only made the same decision in 2019. Accordingly, the fully-fledged sale of real estate to foreign nationals in the UAE capital is only gaining momentum.
Content:
City style
Often, the capital of a state is a small city with official institutions, and all the splendour of the country's first metropolis comes from its more fortunate neighbour. Of course, one remembers the large New York and the provincial Washington, or the nondescript Canberra against the backdrop of the world-famous Sydney. In the UAE, this situation has repeated itself, but with its peculiarities – Abu Dhabi is richer and far more influential than Dubai, but Dubai has twice the population, quadruple the area (including suburbs), and far more world-famous buildings and attractions. So those who cannot imagine life without the Burj Khalifa on the horizon, trips to the Dubai Mall or want to go skiing in Dubai's largest ski resort, will definitely choose Dubai. Its architecture is extremely diverse but tends towards high-rise buildings in the centre and low-rise residential complexes in the rest of the territory. Nevertheless, multi-storey buildings with developed infrastructure are also widespread. Dubai is also more diverse in transportation around the city, with a surface metro, a developed network of bus routes, as well as a tram line and an exotic monorail.
Abu Dhabi seems to be quieter and calmer. The high-rise buildings are concentrated in several central blocks and the rest of the city is occupied by villas and townhouses. Transport is also more designed for car owners or taxis – the bus network is small and there is no metro in the city yet. There’s also less variety of entertainment and attractions in the UAE capital than in Dubai, although there are large theme parks and world-class shopping complexes. Having started high-rise construction and general development earlier than Dubai, Abu Dhabi is lagging behind its ambitious neighbour in terms of dynamics and projects. Therefore, Abu Dhabi is far more suitable for those preferring a more peaceful and secluded life in their own home. Another feature is that only 20% of the local population are foreigners, unlike Dubai, with the opposite ratio. This affects the rhythm of life and the general character of the city.
Luxury housing
Villas in Dubai and Abu Dhabi are diverse and choosing between these two cities can be difficult. As for the luxury quarters, Abu Dhabi has Saadiyat Island, a cultural centre with world-class museums, five-star hotels, golf courses, and, of course, villas.
E.g., villas with 7 bedrooms and 9 bathrooms of 1,730 m2 on the beach of the elite HIDD community sell at AED 70 million (a little over $19 million). A villa on the closed Nurai Island -which can only be accessed by water, providing exceptional privacy- has lower prices. A villa with 6 bedrooms and 7 bathrooms of 1,737 m2 will cost AED 46 million (approx. $12.5 million).
Of course, Dubai is difficult to overtake in premium real estate. In the most prestigious area of Palm Jumeriah, the top price for a villa with 10 bedrooms and 8 bathrooms of 3,250 m2 may reach AED 250 million ($68 million). If you look at the prices of the most expensive real estate in Abu Dhabi, you can choose completely different places for the same AED 70 million:
- Two villas with 6 bedrooms and 8 bathrooms of 920 m2 in the elite community of Dubai Hills Estate, with direct views of the golf course.
- A villa of 660 m2, 4 bedrooms, and 5 bathrooms, with a unique design and finish from Bvlgari, on Jumeirah Bay Island.
- A spacious house with 6 bedrooms and 8 bathrooms of 1,200 m2 in the popular community of Emirates Hills, etc.
There’s almost the same situation in the rest of the price range – offers in Dubai for the same price will be much more, although Abu Dhabi can offer a more interesting and unusual option. In addition, Abu Dhabi has been developing for a long time, and the city feels the influence of the capital's business attitude to a lifestyle differing from the brighter Dubai.
There is also a higher return on real estate for investors in Abu Dhabi. The high demand for property in the capital from locals ensures a high percentage of annual profits – especially for luxury options by the sea. For those who consider buying real estate in the UAE as an investment, choosing houses in Abu Dhabi may be a more profitable strategy than focusing on apartments in Dubai.
