Investment in Abu Dhabi is profitable, as the emirate competes with Dubai for the status of a leading destination in the UAE real estate market. In H1 2023, property transactions amounting to over AED 46.3B (USD 12.6B) were registered in the capital. Since the beginning of 2023, prices for renting affordable apartments and villas have increased by 8%, while rents for luxury residences have risen by 11%.

Investment attractiveness of Abu Dhabi among foreign investors

In recent times, Abu Dhabi is gaining more and more popularity among foreign investors. A bright example of this is the high volume of foreign investment in the emirate’s real estate in H1 2023, which increased by 363% compared to the same period last year. From January to June, foreign property investments exceeded AED 834.6M (USD 227M), as informed by the Department of Municipalities and Transport (DMT). The main reasons for the high popularity of Abu Dhabi are its advantageous location, supportive economic environment and world-class infrastructure. The emirate’s real estate market attract investors from around the world. The greatest interest is shown by individuals from Western Europe, in particular, from Germany, Austria, France and Italy. There is also a large flow of investors from the CIS countries and Australia. The diverse range of foreign investors confirms that the Abu Dhabi market remains one of the most attractive amid the unstable economic situation in the world.

Popularity among tourists

The developed entertainment and cultural infrastructure in Abu Dhabi annually attracts a large number of tourists to the emirate, which has a positive effect on the demand for real estate for rent. As informed by DCT Abu Dhabi, the UAE capital sets a target to welcome 24 million visitors by the end of year. The emirate welcomed tourists from around the world with the highest number of international visitors coming from Saudi Arabia, India, the UK and US. The growing tourist popularity of Abu Dhabi is due to the presence of unique resorts, award-winning theme parks, cultural attractions and a developed entertainment infrastructure here. Among the most popular landmarks in the UAE capital are Louvre Abu Dhabi, Eastern Mangrove National Park, Sheikh Zayed Grand Mosque, SeaWorld Abu Dhabi, Ferrari World Abu Dhabi, just to name a few. The construction of attractions continues in the emirate, which will attract even more tourists in the future. For example, Guggenheim Abu Dhabi and Zayed National Museum in the Saadiyat Cultural District will be opened in 2025. The high popularity of the emirate among tourists from all over the world creates a great demand for rental real estate. This is an advantage for investors who want to receive a stable income from renting out property.

High return on investment

Abu Dhabi is a popular place for living of different categories of residents, including professionals, business representatives and families with children. An increasing number of the emirate’s residents are interested in renting real estate, which leads to price growth. The rental cost of properties in the UAE capital has increased since the beginning of 2023: prices for renting affordable apartments and villas have increased by 8%, while rents for luxury residences — by 11%. At the moment, the growth of rental prices in Abu Dhabi is inferior to the surge in Dubai, but continues to show positive dynamics. Therefore, buying real estate in the capital of the UAE will allow investors to expand their earning opportunities and diversify sources of income. Property in Abu Dhabi is a profitable investment that will bring a stable income from long-term rental. In H1 2023, the estimated ROI for affordable apartments in the Al Reef area was about 8%, and for affordable villas in Hydra Village — 6–7%. The average ROI for luxury apartments on Al Reem Island constituted 6–7%, while indicators for luxury villas are slightly lower, and in popular areas, such as Yas Island, constitute 4–5%.

Abu Dhabi real estate market trends

The Abu Dhabi real estate market offers a large selection of both ready and off-plan properties for sale. Investors can choose the suitable property among apartments, penthouses, townhouses, duplexes and villas. You can also buy full floors and even whole buildings, which will allow you to rent out several residences at the same time. In the UAE capital, innovative residential projects that meet the standards of sustainable development are constantly being built. Such developments will make the UAE capital an even more attractive destination for people from all over the world to live. There is a special program for sustainable building design methodology in Abu Dhabi — Estidama, and a green building rating system — Pearl Building Rating System. According to the system, all buildings must achieve a minimum 1 Pearl Rating. A bright example of such a trend is a project called The Sustainable City — Yas Island. The community will be powered by renewable energy, which will enable residents to save up to 100% on energy bills. In recent years, Abu Dhabi’s real estate market shows record indicators. As informed by the Department of Municipalities and Transport, property transactions in the emirate exceeded AED 46.3B (USD 12.6B) in H1 2023. This proves the high investment potential of the UAE capital.

Demanded areas for real estate investment

In the UAE capital, investors prefer to purchase luxury apartments in the prestigious area of Al Reem Island. The neighbourhood is one of the most demanded waterfront communities in Abu Dhabi, which is distinguished by a white-sand Al Reem Beach and prestigious educational institution — Sorbonne University Abu Dhabi. The sale price for a 1-bedroom apartment on Al Reem Island constitutes about AED 836K (USD 228K). The average ROI for property — 6–7%. A well-known entertainment destination — Yas Island — is also a preferable location among buyers looking for luxury apartments in the capital. The island is a home to the world-famous attractions such as Ferrari World Abu Dhabi and Warner Bros. World Abu Dhabi. A one-bedroom elite apartment can be purchased for about AED 992K (USD 270K). The anticipated ROI for real estate — 6%. Luxurious villas can be found on the main cultural hub of Abu Dhabi — Saadiyat Island. The average price for a 1-bedroom luxury apartment in the iconic area is AED 2M (USD 545K). The estimated ROI for property — 4%. The demanded area for affordable apartments is Al Reef. The community is located close to Abu Dhabi International Airport, which will be an advantage for frequent travellers. A 1-bedroom apartment can be purchased for AED 480K (USD 131K). Properties in the area offer the highest ROI for affordable apartments in Abu Dhabi, estimated at 8%. Hydra Village is among the preferable destinations for purchasing affordable villas. The area is distinguished by the suburban lifestyle concept. The starting price for a 2-bedroom villa is AED 650K (USD 177K). The ROI for villas in the area is 6–7%. As of 2023, the estimated ROI for property in Abu Dhabi is 4–8%, while in Dubai — 5–8%. This indicates that the real estate in the UAE capital is a profitable investment, which will bring a stable income, just like in Dubai.

Advantages of investing in Abu Dhabi real estate

The Abu Dhabi government is launching various initiatives to increase the investment attractiveness of the emirate and transparency of property transactions. For example, Abu Dhabi has revealed a new form of contract for property deals, which simplifies the process of buying and selling off-plan real estate. Unified Contract Template will increase the level of trust between developers and investors. The contract of the new model is an agreement in which the “rights and obligations of the parties” will be set out. It should describe the specifications of the project, indicate the date of completion of construction and schedule a payment plan. Unified Contract Template came into effect on July 3, 2023. One more advantage of investing in Abu Dhabi’s properties is the possibility to get a 10-year UAE Golden Visa. The main benefit is a family sponsorship, including a spouse, parents and children who are 25 years with no age limit for unmarried daughters. Children of determination are granted a residence permit, regardless of their age. Your minimum required property investment should be AED 2M (USD 545K).

Conclusion

The Abu Dhabi property market demonstrates promising growth and favourable investment opportunities, due to a thriving market environment. In the capital of the UAE, new residential projects are actively developing and attractions are being built, which indicates the constant development of the emirate. Abu Dhabi is a great destination for investing in real estate if you are interested in getting a stable income in the long term. There is a large selection of ready-made and off-plan properties with good return on investment, due to the high demand for rent. One of the advantages of investing in Abu Dhabi real estate is the opportunity to safely save your funds against the backdrop of an unstable economic situation in the world.