19 May 2022 – KHaleej Times – www.khaleejtimes.com
The property market in Abu Dhabi is witnessing a considerable increase in demand from international buyers from across Europe, with some real estate agencies recording up to a 50 per cent increase in demand in the first four months of 2022 compared to the same period last year.
The influx has been attributed to factors ranging from growing free zones encouraging business relocation, Abu Dhabi’s unparalleled safety and family-focused living, to the city’s meticulous handling of the Covid-19 pandemic.
“What the Abu Dhabi government has done in recent years in terms of increasing the level of security, the comfort of life here in general, the infrastructure, the conditions for the businesses to relocate their headquarters, all play an important role, and people are starting to realise this,” Evgeny Ratskevich, CEO, Metropolitan Capital Real Estate told Khaleej Times.
The company handled sales of 3.36 per cent of the total market in Abu Dhabi in first quarter of 2022 – out of the Dh11.3 billion in entire sale transactions. The company sold a total of Dh2.8 billion in the top five locations, including Yas Island, Al Saadiyat Island, Al Reem Island, Khalifa City and Al Raha Beach.
“International clients, who have all been cash buyers, include Austrians, Germans, Italians, French, Romanians, the Polish, Russians, those from Kazakhstan, the UK and Australia,” said Ratskevich.
“In the first four months of 2022 we noticed 50 per cent increase compared to the same period of 2021. Furthermore, the value of the property which they bought is more than 75 per cent compared to the same period of last year. This means that not only the number of the investors is rising, but the average ticket size of what they’re buying is also increasing.”
The CEO added that since Abu Dhabi reopened its borders people started to travel to the city and understand what it has to offer. “It’s family oriented, it’s safe, it’s also calmer [than other cities]. And I think that’s the reason why international customers start to invest and relocate to Abu Dhabi.”
Another reason why foreign investors are attracted to Abu Dhabi is because it has cemented itself as a hub for industrial development and economic growth in the region with overseas companies drawn to the freezones, such as Masdar, Khalifa Industrial Zone Abu Dhabi (KIZAD), Abu Dhabi Global Market (ADGM), Twofour54 (Media Free Zone Authority), Industrial City Abu Dhabi (ICAD), etc, where they can operate under 100% ownership in a low-cost operational environment and with full exemption from import, export, corporate and personal taxes.
Ratskevich also explained that in the last two-and-a-half years, the Capital has made great progress to modernise itself and attract people to invest and live in the city. “The recent visa schemes, infrastructure, safety, security and business-friendly policies adopted by the government and its handling of the Covid pandemic all have resulted in international end-users and investors relocating or investing in the city.”
He said that some of the city’s new major developments have also succeeded in attracting overseas buyers looking for luxury. “Aldar launched its’s first branded residence, the Louvre Residence in Saadiyat Island. This project was very successful with international buyers. It’s the first Louvre Residence in the world. So that attracts a lot of attention as it’s a new concept and unique.”
Andrew Covill, Director at Henry Wiltshire International said the agency has also seen a growing demand for properties, especially for high-quality and luxury accommodations.
“We have had strong and steady demand over the last two years, but with availability shrinking and prices rising, the demand is also rising. We have certainly noticed more international buyers which didn’t really exist in Abu Dhabi before,” he said.
“The demand is greatest for villas, especially with a view of the golf course or the sea but the interest is for all villas and townhouses. We also see strong interest for the better-quality apartments, especially those with outside space and a view of water. The international investors are typically looking for prime properties with a strong rental return and opportunity for capital growth.
“We are seeing investors from the UK, Switzerland, Germany and other European countries as well as Russia and Kazakhstan.
“Some of the buyers are choosing the property as a holiday home and some as an investment but there is overwhelming demand for the five-year visa acquired by buying a property over Dh2 million.” This is in reference to the new Green Visa and it’s slew of attainable requirements, including owning a property.
Ameen Al Qudsi, CEO at Nationwide Middle East Properties echoed what the Managing Director of Metropolitan said, that the luxury market in Abu Dhabi is the biggest draw and selling point over the past quarter as they retain their attractiveness due to size, comfort, and amenities.
“There has been an increase in European investors in the UAE, especially in projects near tourist attractions. There is a demand for villas with three to six bedrooms because investors find it easy to resell the property and profit from it in the long run,” he noted.
“This increase has been observed since the opening of Expo 2020 Dubai, following the arrival of millions of tourists from around the world. Another factor driving the increase in European investors is their interest in Bitcoin, which was recently approved and implemented in the UAE, allowing them to invest in real estate with this asset.
“Furthermore, foreign buyers are interested in Abu Dhabi properties because it is the capital and there is a wide range of projects and prices, the majority of which are in ideal locations. The most areas in demand have been Saadiyat Island, Yas Island, and Reem Island.”
The nationalities of those buyers, Al Qudsi noted are, “GCC citizens, Chinese, and Russians, who are trying to invest in a safe and secure country.”
Badia Soufi, Executive Director at Soufiscape Properties, said her company has been receiving at least 40 per cent increase in requests for properties in Abu Dhabi from European buyers overseas especially for properties in Saadiyat Island, Abu Dhabi’s cultural district.
“We have been getting a lot of interest in recent months, especially from investors from Russia and the Ukraine. With much of the instability taking place in Europe at the moment, many investors are turning to the UAE, and recently in Abu Dhabi. Many say they find it a safe environment to put their money in.”
“High-income clients are mainly attracted to Saadiyat Island because it contains a range of different museums like the Louvre, and others that are coming up like the Guggenheim, the Zayed National Museum, and the Natural History Museum,” added Badia.
“The launch of the first collection of Louvre Residences caused a leap in the market,” said Badia. “It sold out in one week.”
The first phase of the Aldar project contained studios, 1-3 bedroom apartments and five bedroom penthouses with a starting price of Dh1.3 million, launched in March 2022, with residences overlooking the iconic museum complex.
Other offerings include Aldar’s Jawaher Saadiyat Villas, which is one of the district’s most exclusive developments. A five bedroom and five bathroom 1,245 sqm villa overlooking beautiful beaches costs over Dh13 million. Hidd Al Saadiyat and Nudra beachside bespoke villas by Imkan Properties are other luxury living options with a starting price of Dh9 million.
For Miramar Real Estate company, the demand in Abu Dhabi has been fluctuating ever since the pandemic and most recently with business slowing down during Ramadan. “In the midst of the pandemic, most real estate companies struggled because most clients were hesitant to make a move,” said Llana Acompanado, Marketing Manager.
“Every Ramadan, we expect that the market movement will decrease in some way” however, Acompanado said, “At the moment, demand from our buyers, investors and renters have increased, and since the beginning of the year demand has increased for properties in Reem Island.”
Rashed Al Omaira, Chief Commercial Officer, Aldar Development, told Khaleej Times, “Abu Dhabi’s real estate sector has established a steadfast position of strength over the last few years, and it continues to reinforce the emirate’s status as a destination for both investment and home ownership. This is evidenced by the strong appetite we are seeing from the overseas and expat residents in the UAE, and from female buyers most recently.
“This positive sentiment in Abu Dhabi’s real estate market was reflected in the record development sales of Dh2.2 billion Aldar recorded in the first quarter of the year, as well as the increased footfall and occupancy levels across our investment properties, which reached 92 per cent as at the end of March 2022, nearing pre pandemic levels.
“The economic and social initiatives that are being introduced by the government, together with the recent changes to business ownership laws and residency visas, will continue to add momentum in the Abu Dhabi market and boost its attractiveness among local and international homeowners and investors.”
Harry, 62, from Germany said investing in a holiday home in Abu Dhabi was a natural decision. “We absolutely love Abu Dhabi and have been visiting the city regularly since the mid-90s. It was a natural choice for us to invest in property in Abu Dhabi.”
Harry and his family invested in a Dh4 million 2-bedroom apartment in the Louvre Residence which he hopes to rent out as well.