Abu Dhabi is a top destination for expats worldwide. But what if you want to put down roots and make Abu Dhabi your home? Buying property can be a fantastic way to achieve stability and build wealth in this dynamic emirate.
This comprehensive guide is designed for expats like you, navigating the ins and outs of purchasing property in Abu Dhabi.
From understanding ownership options to securing financing and navigating legalities, we’ll equip you with the knowledge and confidence to make informed decisions throughout your real estate journey.
Purchasing Real Estate in Abu Dhabi
Law No. 19 of 2005, which governs the Real Estate Sector in Abu Dhabi, provides opportunities for expatriates to acquire properties in the form of floors and apartments, excluding land.
This can be done through four primary systems:
Ownership
Expatriates are granted ownership deeds for residential units, valid for a period of 99 years. This grants them full control over the apartments and villas they purchase, with the exclusion of land.
Musataha
Expatriates have the option to own residential units for 50 years, which can be renewed by mutual agreement for a similar period. Musataha contracts enable owners to enjoy the use, construction, or modification of the property within the specified timeframe.
Usufruct
Expatriates can own residential units for 99 years through a usufruct contract. This arrangement allows owners to enjoy the property and its facilities without the ability to make significant changes.
Long-term Lease
A long-term lease is available for an initial period of no less than 25 years.
Designated Areas for Property Ownership in Abu Dhabi
Abu Dhabi, the capital city of the United Arab Emirates, offers attractive opportunities for expatriates to invest in real estate. The government has designated specific areas where foreigners can own properties to facilitate foreign ownership.
These areas provide a range of options, from luxurious beachfront communities to vibrant urban developments.
Let’s explore the nine designated areas for property ownership in Abu Dhabi:
Yas Island
Known for its world-class entertainment and leisure offerings, Yas Island is a sought-after destination for investors. It is home to the Yas Marina Circuit, which hosts the Formula 1 Abu Dhabi Grand Prix, as well as the Yas Mall, Yas Waterworld, and numerous residential developments.
Saadiyat Island
Saadiyat Island is a cultural and residential hub that showcases the rich heritage and arts of Abu Dhabi. It houses the renowned Louvre Abu Dhabi, the Guggenheim Abu Dhabi (under construction), the Zayed National Museum (under development), as well as luxury resorts and residential communities.
Reem Island
Located off the northeastern coast of Abu Dhabi, Reem Island is a thriving residential and commercial area. It offers a range of high-rise apartment buildings, waterfront promenades, shopping centres, and recreational facilities.
Maryah Island
Maryah Island, also known as Al Maryah Island, is a vibrant business and lifestyle destination. It is home to the Abu Dhabi Global Market (ADGM), the city’s international financial centre, luxury hotels, upscale shopping malls, and residential towers.
Lulu Island
Lulu Island, situated near the Abu Dhabi Corniche, is a tranquil retreat offering stunning views of the Arabian Gulf. It features a mix of residential villas, hotels, and recreational facilities, providing residents with a serene coastal living experience.
Al Raha Beach
Al Raha Beach is a waterfront development that combines residential, commercial, and leisure components. It offers a range of housing options, from luxurious beachfront villas to modern apartment complexes, along with retail outlets, restaurants, and entertainment venues.
Sayh Al Sedairah
Sayh Al Sedairah is an upcoming residential area that caters to expatriate property ownership. Located in close proximity to the city center, it provides a peaceful environment with well-planned communities, green spaces, and modern amenities.
Al Reef
Al Reef is a well-established residential community that offers affordable housing options for expatriates. It comprises villas and apartments set amidst landscaped gardens, with community facilities such as schools, shops, and recreational areas.
Masdar City
Masdar City is a sustainable urban development that aims to create a carbon-neutral and zero-waste community. It focuses on renewable energy and clean technologies, providing a unique living experience for residents who value environmental sustainability.
New Ownership Rights for Foreigners in Abu Dhabi Real Estate
In April 2019, Abu Dhabi’s Real Estate Law was updated to allow foreign ownership of properties in designated investment zones. This change is reflected in amendments to Articles 3 and 4.
Who Can Own in Investment Zones?
Article 3(i) outlines three eligible ownership categories:
- UAE citizens and companies
- Public companies with less than 50% foreign ownership
- Anyone approved by the Abu Dhabi Crown Prince or Executive Council President
Foreign Ownership Rights
Article 3(ii) clarifies that foreign individuals and companies can now directly own real estate within investment zones. This includes all ownership rights like freehold and leasehold.
Rights of Usufruct and Musataha Holders
Article 4 addresses the rights of those holding usufruct (right to use another’s property) or musataha (lease with development rights) for over 10 years. These holders can now sell or mortgage the property without the owner’s consent.
However, the owner can’t mortgage the property without the usufruct or musataha holder’s approval. Both parties can agree to different arrangements if they wish.
Purchasing or Reselling a Property in a Development Project
If you’re thinking about buying a property that hasn’t been built yet, it’s important to check if the company developing the project is registered with the Department of Economic Development in Abu Dhabi.
You should also make sure that the purchase agreement includes the date when the property will be ready for you to move in. It’s a good idea to have a plan in place for compensation if the project isn’t completed on time.
If you’re buying a property that someone else has already bought and is now selling, be careful not to pay any money without a proper sales agreement or contract. It’s important to have everything in writing to protect yourself.
FAQs
Is it a good idea to buy property in Abu Dhabi?
Abu Dhabi property could be a good investment due to its strong economy, high rental yields, and potential for price increase. However, the market has cooled recently, and there are risks like dependence on oil and government regulations. Consider your goals and risk tolerance before deciding.
Is Abu Dhabi good for expats?
Abu Dhabi offers expats a high quality of life with tax-free income, safety, and a diverse community. However, strict social laws, limited cultural experiences, and scorching summers might be downsides. Consider your priorities to decide if it’s the right fit for you.
Is it wise to invest in property in the UAE?
UAE property offers the potential for high returns due to a strong economy and tax-free income, but a cooling market and dependence on oil prices add risk. Consider your risk tolerance before investing.
Is it better to buy property in Dubai or Abu Dhabi?
Dubai offers a more vibrant lifestyle with a higher potential for capital appreciation, but property prices are steeper. Though price growth might be slower, Abu Dhabi provides a calmer atmosphere and potentially better rental yields. The choice depends on whether you prioritise excitement and potential profit or a laid-back lifestyle and steady income.
