Focus Shifts to Abu Dhabi Following Dubai’s Downturn

Despite being the capital city of the UAE, Abu Dhabi had been slow to join the real estate boom in the Middle East. After new property ownership laws were put in place in 2006, the emirate has launched several huge projects, among them being the $14.7 billion Al Raha Beach and the $6.8 billion Shams Abu Dhabi venture undertaken by Sorouh Real Estate.

The initial plans were a copy of Dubai’s blueprint for success, whereby a small number of startup offers resulted in headline grabbing sellouts, in turn confirming the local public’s appetite for investing in real estate in Abu Dhabi. This has led to the marketing of much larger schemes, with attractive financing for investors.

It is going to be fascinating to see how the world responds to such projects at a time when interest in real estate Dubai has significantly reduced, with certain developments now selling at a loss. The emergence of an alternative real estate market in Abu Dhabi will have positive repercussions for the UAE but will undoubtedly worry those who had invested in Dubai.

However, given the wealth of Abu Dhabi, the desire of its citizens to own property in their own city will be great. Apart from this, opportunities will also suit those investors who missed out on the Dubai property boom, if they decide to try their luck in Abu Dhabi. Only time will tell if this is a profitable investment strategy. Much will also depend on the pricing policy for real estate in Abu Dhabi.

These developments may very well draw the world’s attention away from Dubai. By introducing new real estate laws, Abu Dhabi has hoped to establish owning property as an investment class. Once the mystique and novelty of owning UAE property has subsided, prices will most likely reflect those in the international market.

No doubt there will be some ups and downs along the way, but for a wealthy emirate like Abu Dhabi, establishing a modern real estate market in the UAE will have many spin off benefits, including some huge gains for investors. This will almost certainly benefit the UAE’s economy in the long term, even if it creates some competition between the emirates in the interim period.