The United Arab Emirates is a country of expats. Almost 90% of its population is made up of foreign citizens, most of whom live in Dubai and Abu Dhabi. If you dream of living in a luxury apartment on the Persian Gulf coast, rather than renting, consider buying an apartment.
The UAE is one of the richest countries in the world, properties here are not cheap but they are a good long-term investment. You can rent the property out to expats if the hot climate does not suit you. Then, if you wish, you can later sell your property at a higher price.
Dubai is the most popular city with foreigners, but you should also consider Abu Dhabi. Real estate owners from abroad are more welcome in the capital than ever.
Unlike Dubai where foreigners have been able to buy and own properties since 2002, in Abu Dhabi, the capital and second most populous city of the UAE, the right to own properties and land was granted to expats fairly recently. The corresponding changes were introduced to the law in 2019. Before that, foreign citizens were only given the right of ownership for a maximum of 99 years.
Where and How to Buy Real Estate in Abu Dhabi
Apart from long-term rent (25+ years), there are three types of property ownership rights available to foreigners in Abu Dhabi:
- Freehold is the right of full ownership introduced in 2019, that gives one the right to freely manage their properties;
- Usufruct is the right to use a property for 99 years without making any modifications. In fact, it is rent without rights to the land;
- Musataha is another type of rent, this one gives you the right to use the land and even build on it; it is given for 50 years and you have the right to extend it for 50 more years.
Foreigners are only allowed to buy real estate in the “investment zones” and the most popular of these are Saadiyat Island, Al Reem Island, Al Raha Beach and Yas Island. There are nine districts on the list, the remaining five are the Al Maryah, the Al Lulu, Seih Al Sedira, the Al Reef and the Masdar.
District | Main landmarks | Apartment prices |
Saadiyat | The Louvre Abu Dhabi | A small studio apartment starting at 550,000 AED ($150,000) |
The NYU | 1 bedroom, 2 bathrooms starting at 900,000 AED ($245,000) | |
Under construction: | 2 bedrooms, 3 bathrooms starting at 1,400,000 AED ($381,000)
| |
The Guggenheim Museum
| ||
The Zayed National Museum | ||
Al Reem | Central Park with tennis courts and other sports fields
| A small studio apartment starting at 450,000 AED ($122,000)
|
Reem Mall — a giant shopping mall with a snow park | 1 bedroom, 2 bathrooms starting at 650,000 AED ($177,000) | |
2 bedrooms, 3 bathrooms starting at 850,000 AED ($231,000)
| ||
Al Raha | The beach | A mid-size studio apartment or 1 bedroom, 2 bathrooms starting at 900,000 AED ($245,000)
|
2 bedrooms, 3 bathrooms starting at 1,150,000 AED ($313,000)
| ||
Yas | The Yas Marina Circuit | A small studio apartment starting at 450,000 AED ($122,000) |
Ferrari World
| 1 bedroom, 2 bathrooms starting at 600,000 AED ($163,000)
| |
The Yas Waterworld water theme park | 2 bedrooms, 3 bathrooms starting at 900,000 AED ($245,000) | |
The Warner Bros. World theme park | ||
The SeaWorld Abu Dhabi marine life theme park |
Photo: Kamil Rogalinski (Unsplash)
The First Steps
The initial process of buying an apartment in Abu Dhabi is much the same as in any other city in the world. This might seem obvious but we shall still list the things one must do first.
- Study the market. Analyse property prices in various districts. If you plan to rent the apartment out, you should find out what the average rent is and where the rental yield is higher.
- Carefully assess the available budget. Apart from the main sum, you should put aside at least 20% of the property price for the deposit and various fees.
- If you are going to take out a mortgage, you need to get preliminary approval from the bank and find out the total amount of the first payment.
- Open an account at a local bank.
- Choose an apartment. Do you want a new one in a building that was just finished? Or do you want to buy an existing property? Are you prepared to buy a property that is still under construction?
Developers and Websites with Ads
There are dozens of developers in Abu Dhabi. If you chose a building still under construction, you should check that the developer has a licence from the Department of Economic Development and that the end date for the construction is stated in the contract, as well as the provision of compensation for the future owner in the case of missed deadlines.
We recommend looking for real estate sale ads on property classifieds. They will at least help you get a general picture, and may help you find a suitable property.
Hiring a Real Estate Agent and Taking Into Account Extra Costs
As is the case anywhere in the world, one should not completely trust online ads. It is better to look for and buy an apartment with the help of a real estate agent, they should have a licence issued by the Department of Municipalities and Transport. Ideally, one should find a trusted specialist through friends and acquaintances. Real estate agents usually do not have exclusive rights for properties so you do not have to work with more than one. The average fee is 2% of the cost of the deal.
Besides the agent’s fee, you will probably have to pay a registration fee for the apartment, as well as one for the mortgage contract. Additional charges are possible in the municipality, the bank, from the developer, you should ask your real estate agent about them in advance.
Main Documents
The apartment is chosen and the future buyer and seller have agreed to the deal, now they have to sign a contract of intent. This guarantees that the buyer will get the property if all conditions are met. Banks do not provide mortgages without this contract.
The sum of the deposit (usually 10% of the property price) put in by both the buyer and the seller must be stated in the contract. If one of the parties breaks the agreement, they lose the deposit. Therefore, before signing anything and giving your money, you should double-check the dates and the deadlines.
The next step is property assessment. Then the bank gives the green light and the seller gets a No Objection Certificate (NOC) from the developer which is the document confirming that the property is clear of debts including mortgages. After receiving this document, you can pay, sign a contract of sale, wait for the title documents and receive congratulations for buying the property.
You should be patient. Buying real estate is not a fast process, the preparation of each document takes several days and if the appointment is debt-laden, the final version of the contract will take even more time.
Photo: Imtiyaz Ali (Unsplash)
Cherry on Top
Foreigners who own properties in Abu Dhabi and their spouses and children can get a Golden Visa and become UAE residents for at least 10 years. To do this, one must buy residential property for at least 2,000,000 AED (approximately $545,000) and not sell it for at least two years after receiving the visa. You can take out a mortgage but you must pay at least 2,000,000 AED towards the property before applying for a visa.
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In a Nutshell
Buying an apartment in a city like Abu Dhabi may become one of the most important events in a person’s life. As it is also a serious investment, it is important to carefully calculate all the costs and the potential profit. One should deal with trustworthy developers and real estate agents, making the deal as simple as possible and the experience as pleasant as possible.
Cover photo: Nick Fewings (Unsplash)
