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For foreign investors, the United Arab Emirates (UAE) offers not only a hot climate but also the opportunity to invest in a promising and rapidly growing real estate market. Let's explore why residential property in Abu Dhabi has become this sought after by buyers as property in Dubai in recent years.
Content:
- Advantages of Owning Real Estate in the Capital of the UAE
- Arguments in Favor of Buying Real Estate in the Capital of the UAE
- We Can Help You Buy Real Estate in the UAE!
Advantages of Owning Real Estate in the Capital of the UAE
Investing in residential real estate in Abu Dhabi offers two main advantages:
- Renting out properties: One can buy apartments and rent them out to generate rental income.
- Reselling Properties: Property owners can profit by reselling properties and earning the difference between the purchase and sale price.
These strategies can be combined by renting out the property first and then selling it at a favorable price later, as the real estate market in Abu Dhabi is experiencing significant growth. It's worth noting that rental prices are also rising, which increases the rental yield of properties.
The value of real estate in Abu Dhabi has been steadily increasing, with an average increase of 8% in 2022 compared to 2021. In certain locations such as Saadiyat Island and Al Raha Beach, prices have increased by 10%. By combining rental income with potential resale gains, investors can maximize their returns over time.
Investing in Abu Dhabi real estate offers long-term prospects and investors can start earning income within a few months of purchasing the property, especially if it's not an off-plan purchase.
Buying property in Abu Dhabi is done in a similar way to Dubai: paying the full amount upfront, arranging installment plans with the developer, or obtaining a mortgage with the help of a bank loan.
In addition to Dubai, Abu Dhabi is divided into zones with different property ownership regulations. There are locations where foreigners are restricted from buying property.
Arguments in Favor of Buying Real Estate in the Capital of the UAE
Investors prefer to invest in real estate in the capital of the United Arab Emirates for the following reasons:
Safe Investment
Buying property in Abu Dhabi is seen as a safe way to invest capital, ensuring that money doesn't lose value due to factors such as inflation, which can affect funds held in low-interest bank deposits. As mentioned earlier, residential property in Abu Dhabi will see an average price increase of 8% in 2022 compared to 2021. Analysts predict a positive trend in the real estate market in 2023, indicating that investing in real estate can preserve and grow capital.
High Profitability
The capital of the UAE is the wealthiest region in the country. Nearly 90% of real estate transactions in Abu Dhabi are made by citizens and long-term visa holders. These individuals live, work, are educated and retire in the city. As a result, there is a stable demand for housing, resulting in an annual yield of 7–8%, which is a good indicator for any real estate market. It's worth noting that the average cost of a residential property in the city is approximately AED 600,000 (just over $163,000).
Low Property Registration Tax
When buying property in the UAE, there is a property registration tax. In Dubai, buyers are required to pay a tax of 4% of the property value, while in Abu Dhabi the tax is 2%. Real estate prices in Abu Dhabi are generally lower than in neighboring Dubai, for example, villas in Dubai sell for about a third more than in Abu Dhabi. However, the profitability and rate of appreciation are about the same.
Large Expat Community
Abu Dhabi is as welcoming to expats as Dubai. It is home to citizens from many different countries. People from all over the world, including tourists and expatriates, flock to the city to settle for longer periods. It is easier to adapt in an environment with different nationalities and people from different cultural backgrounds than in a more homogeneous traditional society.
High Tourist Flow
By purchasing villas & apartments in Dubai or Abu Dhabi, the owner can rent out the property on a daily or long-term basis. Either way, the owner can expect a steady income. While the primary flow of travelers is to Dubai for leisure, Abu Dhabi is rapidly developing as a tourist destination. The prospects for this prosperous emirate to become the future tourism capital of the UAE are quite high.
Cleanliness, Safety, and Serenity
Residents of the emirate enjoy a peaceful and tranquil lifestyle. The city is relatively quiet and clean. In 2023, the website Numbeo ranked Abu Dhabi as the safest city in the world.
Quality Education
The emirate boasts a highly regarded education system, offering excellent schooling at both primary and tertiary levels. This makes Abu Dhabi a preferred choice for families with children. In addition, people from different countries come to the city for education and become potential long-term tenants of local real estate. This factor further enhances Abu Dhabi's appeal to real estate investors.
Future Development Projects
The city has ambitious plans for the future. Local authorities aim to expand the tourism sector, increase the area of parks and beaches, and undertake more construction of commercial properties, medical facilities, and educational institutions.
Accessibility of Property for Foreigners
Until a few years ago, it was only possible to rent property in this emirate. However, in 2019, citizens of other countries were allowed to purchase property in full ownership, giving them the right to sell, rent, gift, or pass it on as an inheritance.
Golden Visa for Investors
In September 2022, the UAE introduced a law stating that foreigners who purchase property worth at least AED 2 million ($545,000) will be entitled to a 10-year golden visa, instead of the previous 5-year period. Not only the investor, but also their family members, including parents, spouses, unmarried sons under the age of 25, and unmarried daughters, are eligible for residency visas.
We Can Help You Buy Real Estate in the UAE!
Emirates.Estate specialists have extensive experience in the UAE real estate market and will be happy to assist you in selecting apartments in development projects in Dubai, Abu Dhabi, and other Emirates. Contact us today for detailed advice on specific neighborhoods and residential developments in Dubai and Abu Dhabi, professional transaction support and seamless after-sales service.
