Abu Dhabi Property
Rapid growth and rising tourism levels is driving demand, causing a massive Abu Dhabi property surge. There is currently a reported shortfall in property in Abu Dhabi of around 20,000 units and the supply of Abu Dhabi real estate remains scant, partly because Abu Dhabi is not part of a community master-plan.
Supply constraint in relation to demand for Abu Dhabi properties, combined with soaring building material and labour costs, effectively forced average prices upwards by around 30 per cent last year. Capital growth levels of this size appear to be sustainable in the short to medium-term, as the real estate market is still developing and is not interlinked with the financial markets, as is the case in some other mature economies. Consequently, property in Abu Dhabi does not operate on the same fundamentals as a more established markets.
Investors looking at investing in Abu Dhabi properties will be keen to know that average rents for properties in Abu Dhabi rose by 22% last year. Double digit Abu Dhabi rental yields are currently being achieved by some investors. Thus, prices of property in Abu Dhabi will have to rise, so that rental returns achieve traditionally lower yields.
A resident in Abu Dhabi pays no income or capital gains tax, making the emirate a tax haven, and there is no restriction on setting-up residency. Abu Dhabi real estate is offered on a leasehold basis (up to 99-years) as no freeholds are available. Buying costs equate to around 1.5 per cent of the price of an Abu Dhabi property.
Some information contained herein may have changed since it was first published. Homes Overseas strongly advises you to seek current legal and/or financial advise from a qualified professional.