Expert Advice with Crompton Partners Estate Agents: Why Should You Invest in Abu Dhabi Real Estate?
- Why Invest in Abu Dhabi Now?
- Buying Property for Personal Use
- Buying Property as an Investment
- How to Increase Your ROI
We’re delighted to return with the latest episode from our Expert Advice series! For September 2021, we are in discussion with Ben Crompton, Managing Partner at Crompton Partners Estates Agents, about investing in Abu Dhabi real estate in 2021.
In this episode, Ben offers actionable advice for both prospective homeowners and investors, on identifying the right location and property type in which to invest in Abu Dhabi. He also reveals which areas in Abu Dhabi can yield high returns and practical tips for investors to increase their ROI potential.
Watch the full video below, or keep reading for highlights from the episode.
Why is it a good time to invest in Abu Dhabi real estate?
In the last six months of 2021, demand has been high for properties in Abu Dhabi, particularly in the luxury segment, observes Ben Crompton. This is also reflected in Bayut & dubizzle’s H1 2021 sales market report, which reveals that properties for sale in popular areas have seen price increases up to 9%. This upward trend is likely to continue in the coming months, predicts Ben, albeit at a more reasonable rate as projects delayed by the pandemic start to come through.
Abu Dhabi has also maintained robust protocols around COVID-19 testing and vaccination. These initiatives will help strengthen the UAE capital’s position as a global tourist and investment destination, thereby sustaining the demand for real estate in the emirate.
Why should tenants in Abu Dhabi transition to homeownership? What factors should they keep in mind?
In the long-term, buying a home works out much cheaper than renting one, explains Ben. Tenants looking at investing in Abu Dhabi can benefit from the highly attractive interest rates available right now. They’ll also be able to reduce their outgoings while paying off their mortgage at the same time.
When it comes to the locations that prospective homeowners should consider when buying property in Abu Dhabi, Ben explains that this will vary depending on their individual preferences. He recommends taking into account three centres of gravity: their workplace, their children’s school and any kind of entertainment they’d like to be near. For instance, passionate golfers would enjoy living in golf course communities such as Yas Acres or Saadiyat Beach Villas. Finding a property that’s easily accessible from these places is the best approach for those looking to buy a home in Abu Dhabi, says Ben.
Why should investors consider buying Abu Dhabi real estate?
Bayut & dubizzle’s H1 2021 sales market report reveals that buyers can earn up to 8.8% ROI when investing in Abu Dhabi, which makes the emirate an ideal investment location.
For investors, the returns they can earn on the property is the biggest factor, says Ben. He recommends prospective investors do the math and calculate the rental price, service charges and the net return-on-investment that they can earn. Investors need to know both the cost of buying and their outgoings before they make a decision.
When identifying the ideal location for property investments in Abu Dhabi, Ben recommends looking at areas and property types that are easy to lease. Commercial hubs such as Masdar City, Yas Island and Abu Dhabi Global Market at Al Maryah Island are creating more jobs, which in turn, are increasing demand for properties in these locations.
He also mentions that for investors, smaller villas and townhouses for sale in Abu Dhabi are the most popular choice right now. Al Reef and Al Ghadeer are drawing a lot of attention for real estate investments in Abu Dhabi, as is Noya in Yas Island; the latter is also one of the most popular off-plan projects in Abu Dhabi. Similarly, smaller properties such as 2 and 3-bed villas in Yas Acres are extremely popular right now.
Villa and townhouse communities are becoming increasingly popular for property investments in Abu Dhabi due to their affordable service charges. Since villa developments tend to have lower service charges than apartments, this can result in higher ROI potential for investors.
- 3 BEDS
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- 5 BATHS
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- 3341 SQFT
- 4 BEDS
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- 6 BATHS
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- 3486 SQFT
How can investors looking to buy property in Abu Dhabi maximise their ROI potential?
A key factor in earning high ROI is identifying the residential areas that can offer the best rental returns to investors. In Abu Dhabi, these high rental yield locations tend to be located away from the city centre. Prospective investors should focus their attention on suburban mainland communities such as Al Ghadeer, Hydra Village and Al Reef, which offer rental returns upward of 8%, as per Bayut & dubizzle’s H1 2021 sales market report. The up-and-coming area of Manazel Al Reef 2 is also expected to yield high returns, says Ben, once the community has been fully handed over.
However, there are other steps that investors can take to increase their ROI potential when buying property in Abu Dhabi, such as furnishing the unit. Ben also recommends putting careful thought into the type of property you invest in. A larger property, such as a 5-bedroom villa, is likely to keep a tenant and their family for a very long time, ensuring steady returns. However, smaller units such as 2-bedroom villas are considered to be transitional properties, where you’re likely to see tenant turnovers happen more often.
It’s also important to build a good tenant-landlord relationship and make arrangements to conduct property viewings once the current tenant’s contract is coming to an end. This will prevent you from having your unit unoccupied for a long time, which will inevitably affect your ROI.
About Ben Crompton
Ben Crompton is the Managing Partner at Crompton Partners Estate Agents, overseeing the sales and leasing departments of the agency. Ben studied Law at the University of Cambridge, before establishing Crompton Partners in Abu Dhabi.
About Crompton Partners Estate Agents
Established in 2012, Crompton Partners Estate Agents is one of the leading property companies in Abu Dhabi. The agency offers a suite of real estate services, combined with excellent customer service and expert knowledge. This includes residential sales and leasing, property management and corporate housing solutions.
That concludes our Expert Advice segment for September 2021! As you can see, Abu Dhabi is ripe with opportunities for prospective investors and homeowners with both luxury and affordable real estate options available.
Looking for more expert insights on buying and investing in UAE real estate? Find out why you should invest in Dubai’s luxury property market in our Expert Advice episode with Anthony Joseph Abou-Jaoude. Alternatively, learn more about buying ready vs off plan property in our Expert Advice episode with Firas Al Msaddi.
Stay tuned to MyBayut for more tips and tricks on investing in the UAE!
