Buying a property in Abu Dhabi: a complete guide

All sources have been thoroughly verified for credibility. Furthermore, a local real estate expert has reviewed and approved the final article.

Yes, the analysis of Abu Dhabi's property market is included in our pack

Thinking of investing in real estate in Abu Dhabi? You're not alone!

Abu Dhabi's opulence and modernity captivate many, leading them to fantasize about owning a luxurious penthouse or a lavish mansion in this Arabian Gulf gem.

Would it be a profitable investment, though? Are property prices increasing in Abu Dhabi? How much does it cost? Is it better to invest in Saadiyat Island or Al Reem Island? Are there any hidden fees? Which place will give me the best yields?

In this article, everything is sorted out for you.

The SandsOfWealth team knows this market like the back of their hand. Actually, we've compiled all our findings in one pack. Get it now.

In this article, get ready to receive valuable insights from us.

How's the property market in Abu Dhabi?

How is the property market performing? Let's rely on data and figures to find out.

Types of properties

In Abu Dhabi, there are various types of properties available for sale, catering to different preferences and needs.

These include apartments, villas, townhouses, and land plots.

Apartments offer a range of sizes and styles, from cozy studios to spacious penthouses. Villas provide more space and privacy, often with gardens or outdoor areas, while townhouses offer a balance between a house and an apartment.

Additionally, land plots are available for those interested in building their own customized homes or developments.

Each property type offers unique features and amenities, allowing buyers to choose according to their lifestyle and requirements.

What's better: buy or rent?

(If you're buying for yourself and not to rent out)

Whether you've already made Abu Dhabi your home or are contemplating it for the future, you might be pondering whether to buy or rent a property in this modern capital of the UAE.

Obviously, it's better to buy if you are looking for a long-term investment as property values tend to appreciate in Abu Dhabi.

One data can help you make a decision - the property price-to-rent ratio. This helps you understand the connection between rental income and the property's current price in terms of years.

According to Numbeo, the property price-to-rent ratio in Abu Dhabi is around 12.02, which is quite low.

Simply put, on average, you could buy a property with just 12 years' worth of rental payments. Worth buying.

Property prices in Abu Dhabi

On average, according to the last data from Federal Competitiveness and Statistics Authority (FCSA), purchasing a property in Abu Dhabi should cost you around $3,550 per square meter.

Obviously, there are big differences. A luxury penthouse in Al Reef or Al Samkha may have a higher price per square meter than a villa on Yas Island. We actually give you a more detailed breakdown in our pack for buying property in Abu Dhabi and in the UAE.

To give you a sense of scale, it is 5.4 times less than the property prices in the center of New York.

Also, housing prices in Abu Dhabi are 46% cheaper than in Dubai.

The most expensive neighbourhoods in Abu Dhabi are probably Saadiyat Island and Al Raha Beach, while the cheapest areas are Al Shamkha, Al Wathba and Mohammed Bin Zayed City.

Trends

First and foremost, we have to acknowledge that the United Arab Emirates is, today, a very stable country. The last Fragile State Index that has been reported for this place is 39.1.

Keep this in view when pondering the viability of buying a property in in Abu Dhabi.

Besides that, if we look at the IMF's GDP forecasts, the UAE's economy is expected to soar by 17.6% in the coming 5 years, resulting in an average GDP growth rate of 3.5%.

If you intend to invest in real estate in Abu Dhabi it's a good thing because a growing economy usually means people earn more, so they can buy property for themselves or as an investment, causing property demand (and then prices) to increase.

Also, in the UAE, the average GDP per capita has changed by 3.8% over the last 5 years. Despite being minimal, there is still some observable growth.

These are cues signaling that property prices in Abu Dhabi might go up in 2024 and during the coming years.

Looking for more updated data? We've done a big-picture study to find out if it's a good idea to purchase property in the UAE right now.

Buying property in Abu Dhabi

It can be difficult to buy property in Abu Dhabi due to the lack of reliable and up-to-date information available. That's why we have created the pack to buy property in Abu Dhabi and in the UAE.

Buying process

In the pack of documents we have built, we've covered everything about buying a property, from the contacts you'll need to the taxes that need to be paid, and even where to look for available properties.

Now, we're presenting a simpler version to make it easier for you to understand and follow along.

This is the step-by-step process to purchase a property in Abu Dhabi:

1. Determine budget and property preferences.
2. Appoint a licensed Abu Dhabi real estate agent or broker.
3. Choose a property and negotiate the price and terms.
4. Sign a Memorandum of Understanding (MoU) and pay a 10% deposit.
5. Conduct due diligence on the property and obtain a No Objection Certificate (NOC) from the Abu Dhabi Municipality.
6. Draft and sign the Abu Dhabi-specific Sales and Purchase Agreement (SPA) approved by the Abu Dhabi Judicial Department.
7. Pay the agreed-upon installments and transfer fees to the seller.
8. Obtain approval from the Abu Dhabi Municipality and the Abu Dhabi Department of Urban Planning and Municipalities.
9. Register the property with the Abu Dhabi Land Department (ADLD) and obtain the Title Deed (Tawtheeq).
10. Transfer utilities and service connections to your name through Abu Dhabi Distribution Company (ADDC) and Abu Dhabi Sewerage Services Company (ADSSC).
11. Complete property registration at the Abu Dhabi Water and Electricity Authority (ADWEA) and receive the Housing Certificate.
12. Celebrate the successful property purchase in Abu Dhabi!

Also, if you're not from the country, you might want to check our article on how to buy property as a foreigner in the UAE.

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Where to find a property

Discover your ideal properties in Abu Dhabi through these websites:

• The Capital Real Estate Dubai - A premium real estate agency offering a diverse range of properties for sale and investment.
• Bayut - Providing detailed property listings, market insights, and helpful guides for the UAE real estate market.
• Zoom Property - The UAE's leading property portal, featuring a comprehensive search platform for buying, renting, and exploring new real estate projects in Dubai and other cities.
• Houza - A UAE real estate platform offering properties for sale and rent, including commercial properties and short-term rentals.
• Emirates Estate - Emirates.Estate is a platform for verified property listings in the UAE, providing a wide array of options from developers and real estate agencies.

Also, know that we have included contacts of real estate agencies, property lawyers, moving companies, expats communities and more in our pack for buying property in the UAE.

What you can get

As mentioned before, the average price per sqm in Abu Dhabi is $3,550. The cost of a one-bedroom property (60 sqm) is approximately $213,000, and a two-bedroom (85 sqm) would be around $302,000.

However, the amount you pay for a property can be different based on its characteristics and where it's found.

Housing prices in the top areas of Abu Dhabi are usually at a premium. A residence in Saadiyat Island might be around $860,000, and a property in Al Reem Island could cost about $380,000.

Certain places come obviously with a lower price tag. You could find a house in Mussafah for $270,000 or a house in Mohammed Bin Zayed that's only $220,000.

Find a more detailed price list in our full pack for buying property in the UAE.

Common pitfalls

Here are the main pitfalls when buying a property in Abu Dhabi:

• Foreign Ownership Restrictions: Non-GCC nationals face limitations on freehold property ownership, necessitating leasehold options.
• No Title Insurance: The absence of title insurance can expose buyers to potential legal disputes over property ownership.
• Local Sponsorship: Foreign buyers of leasehold properties require a local sponsor, adding administrative complexities and risks.
• Escrow Account Management: Ensure the developer uses a RERA-approved escrow account to safeguard funds during off-plan purchases.
• Cultural Factors: Understanding local customs and norms is essential for successful negotiations and transactions.
• Leasehold Expiry: Leasehold properties might have limited lease durations, leading to uncertainties on property tenure.
• Climate Considerations: Factor in high cooling and maintenance costs due to Abu Dhabi's hot and humid climate.
• Infrastructure Development: Verify nearby infrastructure projects to avoid potential disruptions or devaluation of the property.

We don't want this to happen to you, so we have included a full checklist for your property investment in our pack of documents. Avoid these mistakes and save a lot of money.

Everything you need to know is included in our United Arab Emirates Property Pack

Living in Abu Dhabi

Living in Abu Dhabi is a great experience, with its modern infrastructure, vibrant culture, and high quality of life, making it a great place to invest in property.

Cost of living

The cost of living in Abu Dhabi is generally high, although it is still slightly lower than other major cities in the Middle East. The cost of housing, groceries, and other necessities are all higher than in many other parts of the world.

Here are some examples to better understand the cost of living in Abu Dhabi, United Arab Emirates:

• Rent for a one-bedroom apartment in Al Reem Island: $2,000 per month.
• A meal at a local restaurant with "Lugaimat" (traditional Emirati dessert): $8.
• Monthly Hafilat card for public transportation: $60.
• Utilities (electricity, water, cooling) for a small apartment in Khalidiyah: $180 per month.
• A bottle of local "Laban Ayran" (yogurt drink): $1.50.
• Machboos at a traditional Emirati eatery like "Mezlai": $15.
• Taxi fare for a short city trip using "Abu Dhabi Taxi": $10.
• A cup of "Gahwa" (Arabic coffee) at a café in Qasr Al Hosn area: $7.

Neighbourhoods

We want to show information in an easy-to-understand way. So, we made a table summarizing the different areas in Abu Dhabi. For yields, prices and rents, check our property pack.

Life in Abu Dhabi

Abu Dhabi is a wealthy emirate and the capital of the United Arab Emirates. It has a strong and diversified economy, based largely on oil and gas exports, as well as a growing tourism, financial services, and real estate sector.

Referencing the IMF's data, Abu Dhabi's GDP makes up nearly 24% of the UAE's GDP. Buying property in a rich city is smart because many jobs, people want homes there, and property values stay steady.

What expats usually like the most in Abu Dhabi are the luxurious lifestyle, with world-class shopping, dining and entertainment options, as well as the tax-free salaries.

An important point to note is that Abu Dhabi is an extremely safe city - the crime index is around 12, which is an exceptional score. Abu Dhabi has a strong culture of respect for the law, which helps to create a low crime rate.

A good point for a property investor - Abu Dhabi has a mass rapid transit system known as the Abu Dhabi Metro.

Access to healthcare in Abu Dhabi is excellent, with a Healthcare Index of 70. A strong healthcare infrastructure always improves the desirability of a location, which is a good thing for real estate.

Finally, it is worth noting that Abu Dhabi has two top-tier universities: the Abu Dhabi University and the Khalifa University.

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Renting out in Abu Dhabi

This section is for you if you're interested in purchasing property not for personal residence, but rather for the purpose of renting it out to generate rental income.

Long-term

Tenant Profiles in Abu Dhabi

According to the data reported by Wikipedia, the home ownership rate in the UAE is 28%, which is very low.

It means that, if you decide to buy and rent out in Abu Dhabi, there will be a huge tenant pool. It's a good thing.

If you decide to buy and rent out to long-term tenants, you should target professionals, couples, and families who are employed in the city, expats who work in the UAE, and foreigners who are seeking a long-term stay in Abu Dhabi. Short-term tenants may include tourists, business travelers, and other visitors to the city.

Here is a little summary table we've made for you.

Rental yields

These days, Abu Dhabi presents attractive opportunities in terms of rental yields. In fact, you can easily achieve yields above 9% due to the relatively low cost of housing in comparison to other major cities in the region.

The best rental yields in Abu Dhabi are typically found in residential areas with high-quality amenities and easy access to public transportation. This is because these areas attract tenants who are willing to pay higher rents for the convenience and quality of life they provide.

For further explanation and a more detailed breakdown, you can check the reports and analyses we have made.

Short-term

You could also decide to rent short-term to tourists visiting Abu Dhabi, or to business travelers who need a place to stay for a few days while in the city.

If you decide to go with that option, look for properties in the Corniche area and the Tourist Club area. These are the most popular areas for short-term rentals due to their proximity to attractions and amenities.

Currently, there are approximately 1,385 active Airbnb listings in Abu Dhabi, reflecting a highly dynamic and bustling short-term rental market. The average daily rate stands around $134.

You have the opportunity to generate a nice additional income stream then. According to online testimonials and analytics platform like AirDNA, Guesty and Inside Airbnb, people who offer short-term rentals in Abu Dhabi can make around $1100 per month. Also, the average occupancy rate is estimated at 34%.

Is it worth buying real estate in Abu Dhabi then?

Certainly, buying property in Abu Dhabi is a fantastic idea if you're in it for the long haul. This bustling Emirati city offers a stable economy, low property price-to-rent ratios, and the promise of property appreciation.

With a growing job market, tax-free salaries, and a luxurious lifestyle, it's a magnet for expatriates and professionals, ensuring a steady demand for rental properties. Plus, the potential for rental yields above 9% makes it a profitable investment.

On the flip side, if you're considering a short-term stay or are concerned about foreign ownership restrictions, buying property might not be the wisest choice. The real estate market, though stable, is not immune to market volatility, and transaction costs can be substantial.

Additionally, the high cost of living and ongoing construction in certain areas might not align with your preferences. Lastly, if you plan to rent your property short-term, be prepared for the competitive nature of the market and the need for active management.

In short, buying property in Abu Dhabi is a golden opportunity for long-term investors seeking stability and returns, but it might not suit those with short-term plans or specific concerns.

Make sure you understand the real estate market in Abu Dhabi

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The content provided here is for informational purposes only and does not imply endorsement or advice. While we strive for accuracy, we do not guarantee the completeness or reliability of the information, including text, images, links, or other elements in this material. Following the content and analyses presented here does not assure specific outcomes. For guidance tailored to your individual circumstances, it is recommended to consult with a professional, such as a lawyer, accountant, or business advisor.