Strong fundamentals support Abu Dhabi property

Indeed, the capital city of the UAE is a geological marvel, and sits on some 10 per cent of the world's oil reserves and a considerable quantity of gas. Better still, extraction costs are among the lowest in the world.

The UAE has not suffered from the instability of many of its neighbors and has quietly gone about developing its natural resources without violent lurches in policy and in partnership, rather than conflict with the major international oil companies.

Abu Dhabi is one of the few oil producers in the world that has responded to rising global demand for oil and gas by investing in new production capacity which will shortly reach four million barrels per day. There has also been a willingness to embrace downstream innovation with joint venture partnerships like the Borouge petrochemicals project.

Wise diversification

Further industrial diversification on the back of hydrocarbon development is well in hand for the coming years. And part of the huge oil revenue surpluses of recent years will be wisely invested back into the domestic economy.

The further growth of the Abu Dhabi population therefore looks assured by planned economic expansion, particularly related to hydrocarbon reserves. Moreover, Abu Dhabi is a safe and tolerant place for foreigners from the Arab world and externally to live; and the number of such options is shrinking in the region.

At the same time, Abu Dhabi has chosen to liberalize the ownership of real estate with foreign buyers allowed to purchase automatically renewable 99-year leases on projects in designated areas.

It is only just over a year ago that the government clarified the legal position with regard to foreign ownership of real estate. Before then Abu Dhabi property was stuck in a time-warp of gifted property which could not actually be sold.

Economic reform

In any country a major economic reform such as the liberalization of the real estate sector can be expected to offer a powerful boost to the local economy. To do so in the city with the highest per capita income in the world, although Doha might dispute that claim, is clearly going to have a big impact.

Go to any of the other contenders for the title of the world's richest city - New York, Moscow, London or Tokyo - and property values are higher by a considerable factor. Why should Abu Dhabi not emerge among their number?

Skeptics will laugh but when you stop and think about where prices are today and where they might go to in the future, there is a unique opportunity in Abu Dhabi to buy relatively cheaply at the start of a new market which will only go higher.