Should You Move To Abu Dhabi?
The first thought that comes to mind when thinking about Dubai is that it is a land of the rich. But, as a melting pot of different nationalities, Dubai caters to all kinds of people. The expanding real estate market in the city is a growing testimony to that. It offers high-end villas and luxury properties, but also affordable housing for the salaried classes. Now, what about the other cities in the United Arab Emirates (UAE)?
Destination Abu Dhabi
One of the prominent cities in UAE is Abu Dhabi, the national capital. There are individuals and middle-class families looking to settle in the city but unlike Dubai, the options in the affordable housing segment are limited.
There has been a gradual change in the milieu with the city becoming more lifestyle-friendly. Gone are the days when Abu Dhabi was only about malls and Abu Dhabi Corniche. It has now transformed itself with high-quality social infrastructure made up of world-class healthcare and education hubs, and has been a destination of cultural and sports activities. While only nine per cent of the properties available in freehold areas were less than Dh 11,000 per square metre (psm) back in 2014, the change of laws brought 20 per cent of the buildings in to the affordable range. This has been a positive indication for Abu Dhabi as 15 per cent of the housing is affordable currently as against nine per cent previously.
These changes can be attributed to the change in the profile of prospective residents looking for affordable options in Abu Dhabi, the drop down in the prices of per square metre and the smaller unit sizes for lesser sales prices.
For people looking to rent with a salary of say, Dh 15,000, the areas that can come handy to check are Al Markaziyah, Tourist Club Area and Al Reef. However, as previously stated, the options are much limited.
The rents have fallen down in certain areas by 10-30 per cent since 2014. It is because of the availability of new properties in affordable areas as well as availability of affordable housing options. The movement of people from old to freehold areas has put pressure on the areas as well as increased parking hassles.
However, experts suggest that with a stable supply-demand ratio, the rents aren’t expected to fall further. The smaller units, which are preferred by individuals and small families, are a good investment option, with five-seven per cent expected returns.
More options will be available in the affordable category in future with a stem of factors like cheaper mortgage, higher yield, etc. Long-term investors will be able to gain returns of six-eight per cent.