Abu Dhabi, like Dubai will attract large foreign investments
Realty+ in converse withRabiah Shaikh – Principal Partner, Square Yards, discusses the outcome of Abu Dhabi property now being freehold in certain areas.
How will this new law impact the Abu Dhabi market?
Abu Dhabi previously restricted property ownership mostly to residents of the UAE and the GCC (Gulf Cooperation Council) States. This new law will positively impact the Abu Dhabi residential markets since residential housing units will now be registered to foreign investors under freehold laws instead of 99-year leases as was the norm earlier.
For the first time, foreign investors shall be able to buy freehold property in over 15 designated investment zones in the Emirate, including areas like Raha Beach, Reem Island,Saadiyat Island and Yas Island.
This will not only encourage more foreign investments in Abu Dhabi’s real estate market but also improve the overall title related clarity for property owners, infusing more liquidity into the ecosystem.
Long-term investments from foreign investors are expected to go up. As a result, long-term residency in Abu Dhabi should also become more attractive for foreign nationals. Abu Dhabi developers should also expect higher sales in the mid-to-long run.
Do you see this development being beneficial for Indian developers?
With Indians being one of the biggest investor groups in the UAE market, developers from the country may look at tapping growing interest in Abu Dhabi by commissioning new projects in the Emirate.
Ideally, these could be projects tailored to cater to the needs of Indian nationals who desire long-term residency here. Also, developers can naturally cash in on positive sentiments to drive demand for projects located in zones which are conducive for freehold property ownership in Abu Dhabi.
Overall, post this new freehold ownership law, many Indian developers operating in the UAE will benefit from higher demand while other players may also consider expanding to this market.
Will Indian homebuyers rush to invest in Abu Dhabi property?
Indians are one of the leading foreign investors in the UAE’s real estate market. DLD (Dubai Land Department) figures have highlighted real estate investments from Indians in 2018 which touched Dh12 billion. Around 6,263 investors purchased property, ranking the highest as a collective group by way of transaction values and numbers.
With Dubai attracting large-scale real estate investments from Indian nationals, Abu Dhabi is expected to follow suit soon courtesy the new freehold ownership laws.
With their love for all things ‘freehold’, Indian investors would naturally be encouraged to purchase property in Abu Dhabi now on, which had so far been a largely untapped market. The industry should expect increased property investments from Indian nationals in the Abu Dhabi market over the next few years.
Will this latest development level the playing field between Abu Dhabi and Dubai?
If we go by the numbers released by the Dubai Land Department (DLD), the UAE market received investments to the tune of Dh91 billion in 2018, courtesy 55,928 investors globally. Investor interest continues to remain at high levels as far as the Dubai realty market is concerned.
With the newly announced freehold regulations, property investments by foreign nationals are expected to go up considerably in the Abu Dhabi market as well.
With this new law in effect, Abu Dhabi, like Dubai could attract its own share of large foreign investments into freehold properties. It is a safe assumption to make today.
However, the Abu Dhabi market must also score at par in terms of other fundamentals including average returns expected, capital appreciation, economic growth prospects and infrastructural growth, if it truly wants to be compared with the Dubai property market.