Abu Dhabi named 'world winning city in the making'

For those who have already invested in real estate in the emirate this can only be seen as good news.

For those waiting on the sidelines, the message could not be clearer - buy now, while you still can.

Abu Dhabi's real estate sector is continuing to grow at a steady 22% to 23% per annum, according to Department of Planning and Economy (DPE) figures.

Over Dhs400bn worth of projects were announced or confirmed during the city's second Cityscape exhibition, highlighting the amount of FDI being poured in to the emirate.

According to the DPE report, real estate capital turnover for Q1 2008 stood at 25.8%, a huge increase in just a twelve month period (Q1 2007 turnover figures were 9.2%).

The key to Abu Dhabi's accession into the global property spotlight is manifold.

International cultural destination

The emirate has successfully begun to market itself as an international cultural destination, with groundbreaking deals with institutions such as the Louvres and the Guggenheim.

In addition, Abu Dhabi is set to host the UAE's first Formula One Grand Prix in November 2009.

The rise in property prices reflects this upsurge in the city's popularity. Abu Dhabi's growth rate is averaging 5.2% per year.

And the standard of living is good for those that have made the city their home; the UAE capital topped the world list in terms of GDP per capita, which averaged $60,000 in 2006.

Huge infrastructural investment, legislation that makes it easier for foreign businesses to set up, including the creation of a number of specific free zone authorities, and the energy sector boom have fuelled the influx of workers into the city.

The DPE puts the shortage of housing units at 7,500 for 2007. They predict that this will have risen to 20,000 by the end of 2008.

Property premium

With such a premium on available property, the onus is on the landlords to name their rentals prices. And the 'Plan Abu Dhabi 2030', which lays the foundation for the emirate's growth over the next 25 years ensures that there will never be a glut of developments coming online at the same time.

In effect, Abu Dhabi real estate is as close as you can get to a safe bet in terms guaranteed returns. Additionally, as the dollar strengthens - as it is bound to eventually do - or if a revaluation of the dirham does take place, contrary to current indications, the property value will increase when converted into international currencies.

HSBC bank has estimated that house prices in Abu Dhabi rose by 30% in the 12 months leading up to January 2008.

The Kershaw Leonard Cost of Living Report 2008 highlights an even more encouraging figure for home owners: Villas and apartments in the Al Reef development (which is still under construction) have increased in asking price by an average of 80% and 100% respectively.

With this in mind, do potential investors really need any more incentives before taking the plunge?

See also:
Abu Dhabi house prices jump 53% as off-plan booms
Abu Dhabi property price increases 'certain'