Can Abu Dhabi buyers learn from the experience of Dubai?

It is hard to know what has exactly turned market sentiment positive in Abu Dhabi.

At first buyers hesitated - despite or perhaps because of what had happened in Dubai. They also may have wondered if the authorities were really serious this time about these particular mega-projects, and have feared that another change of heart might leave them homeless.

There was also some concern about what leasehold rather than freehold title might mean for Abu Dhabi buyers, albeit leasehold for apartments is common practice in many global real estate markets.

However, this hesitation has been overcome in recent months, and the anticipated flood of off-plan buyers for apartments in schemes like Aldar's Al Raha Beach and Sorouh's Shams Dubai skyscrapers have emerged.

Cityscape

Most notably at the Cityscape exhibition this autumn it became clear that the tide had turned in the UAE capital with happy developers boasting about just having sold an entire tower or two.

It might be that the whole Abu Dhabi property scene has become so visible in the capital - with a number of mega projects clearly underway - that people began to believe what they could see with their own eyes.

This has clearly been underpinned by the huge ongoing advertising and marketing spending by the main players. Sorouh's biggest advertisement poster ever in the flight path of the Dubai International Airport is a good example of this effort.

At the same time, the Abu Dhabi Government has been proactive in speaking at conferences and promoting a single vision of the future of the real estate sector. The publication of an urban plan on the government's internet site has left no doubt about where it intends to go.

Buy now?

Is this now the time to be buying into this vision? The answer has to be an unqualified 'yes'. The early buyers of property in Dubai did exceptionally well, and had to take far more on promise than is presently the case in Abu Dhabi.

Some buyers are worried that Abu Dhabi prices are pegged to levels seen in Dubai today. But who is to say that by the time they take delivery of their properties that prices will not be very much higher, if only because inflation is soaring in the UAE and housing is not being built fast enough to meet local demand.

In any event it is highly unlikely that anybody could be a loser through investing in Abu Dhabi real estate which has one of the lowest costs in the world compared to per capita GDP, according to HSBC. Early buyers could well be just as amazed by where prices end up as in Dubai.

See also:
Video report: Sadiyat Island, Abu Dhabi
Abu Dhabi likely to follow Dubai on regulatory framework