Buying Property in Abu Dhabi - 10 Good Reasons

We have just returned from a wonderful holiday in the United Arab Emirates visiting the well known shopping haven of Dubai as well as the lesser known capital Abu Dhabi.We have family living out there, so its a perfect way to combine a beach holiday with a family get together.

Currently the UAE is experiencing a huge boom in the construction industry and the Dubai skyline is littered with giant cranes. They are in the process of contructing the tallest building in the world, which when finished, will be more than half a mile (800m) tall with 160 floors, incredible! Many people are familiar with Dubai's booming property market with projects like Palm Island and 'The World' attracting huge media interest. The Dubai "ship" has to some extent sailed, with the massive gains (up to 200%) of the early part of the decade, now being replaced with more modest growth as supply catches up with demand.

Abu Dhabi

We have a personal interest in the property market, having bought property in Abu Dhabi last year. Until August 2005, the property market had not been open to non nationals, but new laws have opened up the market to all buyers. Recently, further changes in legislation have upgraded property from leasehold (similar to properties in London whereby the purchaser simply buys the right to live in the property for a period of time usually 98 years) to freehold which means the buyer now owns the property outright and forever.

Ten Good Reasons

1. If you buy an apartment or house in Abu Dhabi to let out for rental income, you will not be charged income tax on the rental income you receive.
2. Rent is paid annually in advance which means you will receive a full year's rent in January for the forthcoming year. Leases tend to be long term and this means a steady reliable income stream.
3. When it comes to selling your property there is no capital gains tax payable in the UAE.
4. Unlike elsewhere in the world, you pay no stamp duty on Abu Dhabi property.
5. The only charge of any significance that you have to factor in is the 1.5% land registration fee which is payable upon completion.
6. The UAE Dirham is directly pegged to the US Dollar, therefore as the Dollar rises and falls so does the Dirham. As the value of the Dollar is so weak compared to the British Pound and the Euro, any payments made to the UAE from the UK and Ireland will be enhanced. Our apartment will cost us 20% less than we first thought, due to the currency movement.
7. Abu Dhabi, the capital of the UAE is a beautiful city. With year round sunshine, a beautiful coastline and some of the world's most exclusive hotels, it makes an ideal holiday destination. In the next few years it will host Formula 1, build the only Louvre museum outside of Paris and also boasts the largest hotel in the world; the Emirates Palace. The launch last year of Etihad Airlines with direct flights from Abu Dhabi to Europe, the Far East, Australia and America has also made it a more attractive destination.
8. The demand for rental property in Abu Dhabi is increasingly strong and steady due to the constant increase in the number of residents. Over 200,000 new residents arrived in Abu Dhabi last year alone, one of the main factors which has resulted in the demand for rental accommodation far outstripping the supply. As a result, high rental yields are very achievable; in 2006 they exceeded 15% and with the development of local industrial hubs as well as two new airport terminals this trend is forecast to continue.
9. Capital growth has continued to exceed expectations, particularly in the last twelve months, and is expected to level out at 15% per annum at least for the medium term. The bank we bought our apartment from has started reselling the apartments, to a small number of investors, and prices are already 15% up after only 14 months, and the property is still off plan.
10. The build quality, architectural standard and finish of all construction work in the Emirates are excellent, with world class attention to detail. Some of the security and technology features on our apartment are simply incredible.

For more info on Abu Dhabi or property abroad please email us.