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Investing in property in Abu Dhabi
The Arabic fast growing capital of Abu Dhabi is the richest and largest of the seven states United Arab Emirates. The city lies on a T-shaped island, which leads to the Persian Gulf, the west-central coast, and has a population of about 900,000 inhabitants. It currently controls 90 percent of the oil wealth in the region, making it one of the largest oil producer in the world.
Economy
Abu Dhabi is the largest reserve of fossil fuels in the United Arab Emirates, is the fourththe largest natural gas producer in the world, has a per capita income highest in the world, is home to nearly all Arabs Fortune 500 companies and currently has more than 88 billion barrels of proven oil reserves are sitting.
However, the emirate is now actively seeking to reduce its dependence on oil, and a diversification of financial services and tourism. Billions of pounds have been living for infrastructure projects and the development of leisure, assignedand cultural systems of the oil-rich emirate.
Abu Dhabi and Dubai is determined to challenge highlighted as a major tourist destination, with its subtropical climate and 700 km coastline of unspoiled beaches and places of cultural interest.
Tourist attractions include the Louvre and the Guggenheim Museum, a nature reserve, a UAE Public Library, the National Theater and the development of EUR 13.5 billion Saadiyat Island.
In 2009, Abu Dhabi will host its first Formula –Grand Prix on Yas Island, which includes a Ferrari theme park. Otherwise, Aldar Properties is developing a $ 3 billion (£ 1.5billion) Motor World, including service centers and a museum, as well as offices, hotels and homes for 30,000 people.
David Nicholls of EM concepts says: “The plans of Abu Dhabi are truly remarkable. The transport infrastructure is already strong and pockets are bottomless.”
The emirate is served by several airlines, including BritishAirways, BMI, Eagle Air, KLM, Etihad Airways, Gulf Air, Qatar Airways and Lufthansa. Among other things, employment hotel is currently over 80 percent, compared to about 60 percent in 2003.
James Gonzalez Obelisk comments, “Abu Dhabi is planning a major destination of world tourism. Within the next three years, the Emirate of major investments in airport infrastructure, the increase in airport capacity from seven million to 20 million passengers’ s year to see2011th “
Abu Dhabi is growing fast and the levels of tourism is increasing demand, leading to a massive increase of property, very experienced in Dubai a few years ago.
Real Estate Market
In contrast with adjacent Dubai, where there is a risk that it soon, a total oversupply of property in Abu Dhabi, there is currently a deficit of about 20,000 housing units reported. The availability of housing is still weak, because Abu Dhabi is not part of a communityMaster Plan, as the pioneering work of Emaar and Nakheel in Dubai.
Carlo Walther, head of business development for Rightmove Overseas, said:
“Viewed from the perspective of a client, Abu Dhabi has several serious advantages … With a planned investment of 200 billion dollars over the next 10 years, it’s no wonder that there is excitement around this market.”
Bond offering in terms of demand, coupled with building materials and high labor costs, effectivelyforced the average price of property in Abu Dhabi up by about 30 percent last year from HSBC.
This level of capital growth appears to be sustainable in the short to medium term, long term, as Abu Dhabi property market is still in development and is not related to financial markets, as happens in some other mature economies. Thus, the real estate market in Abu Dhabi does not work on the same basis as an established real estate market.
The release of the newLiving systems is currently being done in a controlled manner, so as to avoid an oversupply. However, the city’s population is increasing by a further pressure on the real estate.
Moreover, a glance at guides to aging of the United Arab Emirates appears to act in order to show that property prices continue to appreciate to know into practice. The size of the mortgage market in United Arab Emirates, which is currently about $ 4.4billion (£ 2.2billion), is expected to grow to about $ 44billion (£ 22billion) over the next fourYears, according to The Financial Group, EFG Hermes.
Strong demand is being recorded, would real estate prices in Abu Dhabi – which reportedly average around £ 250 per sq ft – going to see those in Dubai over the next three years, according to investment bank in the UAE capital Shuai . HSBC forecasts that average prices of properties in the United Arab Emirates is a further 25 percent considered this year alone.
Flipping
Rapid increase in prices has prompted some speculative investorsResale before they were built, unlike the “Mirror”. Buy off-plan property abroad, and “mirroring” It is not uncommon, especially in an emerging market like Abu Dhabi, as this can prove very lucrative opportunity to earn money.
Middle East business provider, AME Info recently reported that some property investors are doubling their money in off-plan units in less than nine days. But investors should be aware of the potentially highin connection with “mirroring” property, especially in a market that lacks transparency. A means of long-term real estate investments often reduce the associated risks.
Buy-to-let
Investors who have a longer-term investments will be located, the property was to learn that the average rent in Abu Dhabi rose by 22 percent last year, according to HSBC. Double counting will be rental yields currently achieved by some buy-to-let investors. Property prices will thenhave to obtain, so that the rental income to reach traditionally yields lower, as is the case in more mature markets of property.
However, Abu Dhabi is now trying to control inflation, rental, with a cap of rent. The city intends to follow the example of Dubai, which recently lowered the cap secant to five percent.
Favorable Financing
The dirham (AED) for the dollar at a fixed value, namely, the UAE Central Bank, the policy interest rates in the United States to follow. During the recent U.S. poorShow dollars, has devalued the AED, it is also lowerered the cost of money borowing for real estate in the United Arab Emirates for the purchase. However, the falling dollar on inflation problem in the United Arab Emirates. Therefore, the current mechanism turns out to be a problem. Consequently, there are now murmurings that the AED may finally free from the dollar in the United States.
“The only way to lose is to combat this problem (inflation), the peg and allow the AED float freely,” says Nicholls. “If the breaks AEDfree from the dollar, then the value of the Arab Monetary would quickly appreciate what a higher return for the investor when the AED must be translated into real estate assets to be sold and funds back in the United Kingdom. “
Tax Efficiency
As a resident in Abu Dhabi, there are no income or capital gains tax to pay, making the emirate a tax haven, and there is no restriction on the establishment of residence. Properties in Abu Dhabi will offer a base rent of up to99-years, because there are no apartments available. On the same level of costs to about 1.5 percent of the price of property.
Abstract
The demand far exceeds supply, quickly come to appreciate the real estate prices, low borrowing costs and strong rental returns, 2008 should be a great year for the property in Abu Dhabi as an asset class.
http://www.bankcreditsite.com/2010/01/investing-in-property-in-abu-dhabi/
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