Buying Property

Buying Property in Abu Dhabi - The Choice

In a bid to attract overseas investments in the UAE, architects and construction companies have been allowed enormous freedom in creating their property developments. Some of the most audacious construction projects the world has seen have been undertaken in this region. Even if these headline-grabbing properties are not to everyone’s taste or budget, there are plenty of high-quality homes to choose from.

The vast majority of property buyers have previously been looking for new or off-plan property in the UAE and the Middle East. Although there are some traditional Abu Dhabi properties for sale in the more established areas of Abu Dhabi, foreign ownership is largely restricted to designated areas, which invariably are the new projects that have been taking shape in recent years. However, as more schemes are completed, there will be an increasing number of modern resale properties in Abu Dhabi, Dubai and the Middle East.

It is difficult to exaggerate the scale of construction and the sheer variety of Abu Dhabi property. Small apartments, luxurious penthouses, spacious villas overlooking perfectly manicured golf courses, waterfront properties on a vast marina, beachfront properties – the list goes on. There’s a dazzling array of property styles too, from designs based on tradition Arab architecture to Mediterranean-style villas and cutting-edge high-rise blocks, via everything in between.

The Abu Dhabi property you invest in will depend a great deal on your reason for buying. Pure investors in Abu Dhabi should consider how the location and facilities offered by a property will appeal to potential tenants with an objective mind. Property buyers looking for a holiday property will make a much more personal choice about the type of property they invest in.

Buying Property in Abu Dhabi - The Market

The UAE was the first Middle Eastern country to embrace the idea of property investment from overseas property buyers and it boasts the most mature property market in the region. It has seen some very dramatic price rises over the past five years. Property rental returns have been good and with demand exceeding supply, rents have increased quite dramatically in recent years. However, in more recent times rents have settled somewhat with the current economic downturn.

As more projects are completed in the region, the property markets will no doubt adjust. Anyone looking to buy property now will be impressed with the figures over the last few years but should bear in mind that speculation and limited supply of finished homes have been major contributory factors in the region’s property price boom.

Since the start of 2009 the global economic slowdown has started to impact somewhat. However there are still ambitious plans for Abu Dhabi, Dubai and the Middle Eastern states to increase commerce and tourism despite the current economic climate. There is still likely to be a sustained demand for quality property across the board. The buyer beware note is - before proceeding with any acquisition, ensure that your finances are firmly in place.

Abu Dhabi in 2010 expects additional stock in a largely under-supplied market which will provide relief and additional options to Abu Dhabi residents. These units will be the first since the recent freehold laws were introduced in Abu Dhabi.

The Process of Buying Property in Abu Dhabi

  • Buying Abu Dhabi property is now much easier than it once was, thanks to the law allowing foreigners to own freehold title. To buy a new-build off-plan, the process is easy. The property buyer reserves a unit and pays an initial deposit – usually 10%.
  • The remaining balance is paid in stages until the completion date. This varies from developer to developer and should be agreed at the outset of the deal.
  • For resale property, a holding deposit is paid at the outset and completed once funds are in place to carry out the exchange.
  • Bear in mind that although Abu Dhabi and the UAE is tax-free, you may find that you are required to pay taxes in your home country. This may apply to rental income or capital gains on disposal of the property. Get professional tax advice on this matter to avoid any unexpected bills at a later stage.

Buying Property in Abu Dhabi - Fees and Taxes 

  • For new-builds, expect land registration fees of around 2%, and a year’s upfront maintenance charges, which vary depending on the development.
  • If buying a resale property, all the charges of a new-build apply, plus a 1% to 2% transfer fee, depending on whether the property is completed or not. 
  • Allow between 2% and 5% for agents’ fees.
  • While a lawyer is not legally required when buying property in Abu Dhabi or the UAE, it is nevertheless highly recommended that you get independent legal advice, to review the contract.