A look at the real estate market in Abu Dhabi

A look at the real estate market in Abu DhabiBen Crompton

The capital Abu Dhabi wants to diversify its economy from gas and oil by launching a number of initiatives including several real estate developments.

These real estate projects seek to attract not only local investors but also international buyers to the emirate's property market.

Ben Crompton, Managing Partner of Crompton Partners Abu Dhabi, explains why this is the best time to invest in the capital.

Investor sentiment in real estate after the decline of oil prices

In Abu Dhabi, most people understand that falling oil prices will not affect the emirate much.

Abu Dhabi has an ambitious Vision 2030 project and plenty of reserves to fund it even in the face of low oil prices.

It is continuing to fund its huge infrastructure projects such as the Louvre Abu Dhabi and The Guggenheim Abu Dhabi on Saadiyat Island, the Etihad Rail and the Midfield Terminal, which are bringing in a lot of new workers to the emirate, keeping rents high and investment returns solid.

Abu Dhabi's low extraction price also makes it one of the best-placed oil producers in the world to weather the current storm.

Prime properties to invest right now and why

Right now, the waterfront community Raha Beach is still stable and popular. The great community facilities and quality developer are a pretty safe bet and rents continue to rise here.

There are some good options on Al Reem Island which is popular with young professionals wanting to be close to the city.

Saadiyat Island is priced a little aggressively.

Al Reef remains a good budget option.

The newcomer out of left field is Al Ghadeer which, with its proximity to the Expo 2020 site and the Al Maktoum International Airport, is looking like a great investment opportunity for all.

On whether it is safe to buy or rent in such volatile market conditions

In almost any market, it is a much cheaper and more sensible option to buy rather than rent.

The only circumstance I think where it makes more sense to rent is if people have an unstable employment situation where they might have to go home at any moment.

But it almost always makes more sense to pay your housing allowance towards your mortgage rather than to a landlord.

Advice to first-time property investors

Approach a broker who can guide them through the process and who can offer them genuine impartial advice.

Brokers get their fee from buyers which means they are representing the buyer and need to represent their best interests.

Get a recommendation, go online, find someone you can trust.

In short, conduct proper and thorough due diligence to hire the best broker who will ensure their requirements are met.

What investors can expect this year

I think 2015 will see increasing but stabilizing rents and sale prices.

The correction in Dubai will slow down prices in Abu Dhabi but continued investments in the capital will keep the population moving up and returns for investors will remain good.

Property is one of the oldest and most respected investments in the world and should make up a part of any investment portfolio.

If you are looking to make investments in real estate, whether it is residential or commercial, find a broker you can trust and stick with him or her.

Abu Dhabi property market's advantage over Dubai and other GCC metros

The law in Abu Dhabi is currently very landlord friendly.

Rent raises are not capped and there is no rent calculator. Landlords may charge their tenants whatever the market will bear.

In addition to that, there is no difficulty in evicting tenants once their lease term has finished. You just need to give them two months' notice before the end of their lease.

Property trends in Abu Dhabi for 2015

Abu Dhabi has always been considered to be a more peaceful and calm place for residence. This positive sentiment has always reinforced investor confidence in the capital. According to reputed property portal Bayut.com, the most appealing properties in Abu Dhabi in 2015 are Al Reem Island, Khalifa City A, Al Raha Beach, Al Reef and Mohammed bin Zayed City. Al Reem Island is the most searched property because of its affordability and luxurious lifestyle.

Check out the Dubai hotspots for rental investment

Source: Zenifer Khaleel, Special to Freehold


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