25.04.2024 21.05.2024 161 0 0
Investors are interested in purchasing foreign real estate, and the UAE occupies a leading position among countries where foreigners prefer to buy housing. Until April 2019, foreign citizens could not own real estate in the UAE capital, however, changes made by the government allowed expats to become full-fledged owners of real estate in freehold areas. These measures have boosted investment activity in Abu Dhabi. Today, the emirate successfully competes in this area with Dubai and has significant potential for further growth. Why is it worth investing in housing in Abu Dhabi?
5 Reasons to Invest
- A variety of facilities, from seaside villas to modern apartments.
- The strategic location of the city at the junction of three parts of the world provides access to global markets and business opportunities.
- The real estate market is ready for steady growth in 2024, with a projected increase in the cost of housing up to 5%.
- The policy of the authorities guarantees transparency of transactions and protection of investors’ interests.
- The Golden Visa program allows you to obtain a local equivalent of a residence permit for investments in real estate worth from 2 million AED ($ 544,500).
These circumstances make investments in houses and apartments in Abu Dhabi no less profitable than in real estate in Dubai. At the same time, you can find housing in the capital at more favorable prices.
The influx of tourists stimulates interest in real estate
The growing popularity of the city among tourists is explained by the unique resorts, theme parks, cultural attractions and a variety of entertainment. Among the interesting places are the Louvre Abu Dhabi, a branch of the legendary Paris Museum, Mangrove National Park, Sheikh Zayed Grand Mosque, SeaWorld and Ferrari World amusement parks.
The emirate is actively building new attractions such as the Guggenheim Museum and the Zayed National Museum, which will help increase the flow of tourists. In light of the great interest in the capital, the demand for rented real estate is growing, which allows investors to receive a stable income.
The state of the market
Abu Dhabi is becoming increasingly attractive to overseas home buyers. In the first half of 2023, the volume of 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, were the most active. Investors from the CIS countries and Australia are also showing significant interest. The large number of interested buyers underlines the attractiveness of the capital’s market as a reliable destination for real estate investments against the background of global economic instability.
Prices in the emirate continue to rise. The highest rates of price increase were noted for housing in the Saadiyat Island community. In 2023, the cost of apartments in the premium segment here increased by 8.73%, houses – by 12.9%.
Return on investment
The budget apartment sector has the highest profitability ratio in the Al Reef area. It reaches 8.04% per annum. The indicators in the Masdar City community are slightly lower. They make up 7.31%. Al Ghadeer community is in third place with 7.14%.
In the elite facilities sector, the Al Reem Island community is in the first place in terms of payback. Here, the profitability ratio is 6.65%. For housing in Yas Island, it is slightly lower – 6.52%. Al Raha Beach closes the top three with 5.46% per annum.
Currently, the price growth in the capital cannot reach the figures of villas and apartments in Dubai, but there is a noticeable positive trend. In this context, buying real estate in the capital emirate provides investors with a chance to expand their earning opportunities and diversify assets.
Projects under construction remain the most profitable
The number of purchase and sale transactions of 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. At the same time, there is an increase in the number of facilities under construction. Based on these dynamics, it is safe to predict that the volume of transactions will continue to grow in 2024.
Why is it profitable to invest in facilities under construction?
- The new projects are characterized by up-to-date design and modern amenities.
- The price from the developer is often more favorable due to discounts and special offers.
- Developers can take on some of the costs and offer flexible payment plans in installments.
- The novelty of the facilities excludes repair costs.
Due to these factors, investors have every reason to expect a high return on investment. They can also purchase apartments or villas at a more attractive price at the excavation stage and sell them after the completion of the object with a profit of up to 30%.
Conclusion
Abu Dhabi’s real estate market is showing steady growth and offers attractive opportunities for investors. The capital of the UAE is actively developing, new complexes and attractions are appearing here. Ready-made houses and apartments in new buildings under construction are available. The latter can be considered as the lowest-cost asset due to the flexible payment schedule. The city is an ideal choice for those who plan to invest in real estate in order to obtain a stable income for the long term.
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