Comparing Dubai and Abu Dhabi property markets: prices, yields, residence permits
Dubai and Abu Dhabi are two of the UAE’s largest cities that are the most popular among international investors. In general, Dubai is more attractive for expats who account for about 85% of its population. Abu Dhabi, in its turn, is more often сhosen for property investment by Emirati nationals and those from the neighbouring Gulf countries. Nevertheless, Abu Dhabi's property market can also be of interest to foreign investors from other regions.
In this article, we will take a look at the key parameters of the two emirates’ markets: residential property prices, average yields and return on investment. We will also compare the residency programmes in the two emirates.
Dubai leads in terms of supply and pace of construction
As data from the Dubai Land Department shows, the volume of construction in the emirate is increasing every year and has not even declined much due to the COVID-19 pandemic. Already in the first quarter of 2022, 15,441 units have been completed in Dubai. 30,019 units were built in 2020 and 29,180 units in 2021.
In Abu Dhabi, construction volumes are not as high. Accordingly, the number of units on the market is limited. In the first quarter of 2022, less than 200 units were completed, according to CBRE. Another 9,588 units are expected to be completed by the end of the year. During 2021, 4,182 new housing units were built in the emirate.
The Dubai government also has high-flying plans for the emirate’s development. By 2040 it is expected that:
- the population will double;
- the land area occupied by hotels and the tourism sector will increase by 134%;
- the area dedicated to commercial activities will reach 168 km²;
- the land area occupied by educational and health facilities will increase by 25%;
- the length of public beaches will increase by 400%;
- nature reserves and green areas will account for at least 60% of the emirate.
Abu Dhabi’s economy is still more oil-dependent than that of Dubai, so the emirate’s main goal is to overcome its economic dependence on oil and develop other sectors. Abu Dhabi’s Land Department also aligns with the government’s urban development plan, which is still aimed at laying the groundwork for urban planning, construction and transport.
Real estate value: Dubai is overtaking the rate of the price increases
Both Dubai and Abu Dhabi have urban areas where foreigners are allowed to buy property and those available only for UAE citizens.
In May 2022, the increase in flat prices in Dubai was 9.6% and the cost of villas increased by 19.8% compared to May 2021. This was reported by the CBRE consulting company.
The average price of flats in Dubai in May this year was $3,229 per square metre. Analysts estimate the average cost of villas at 3,832 US dollars per square metre.
From $505,000
Completion in: 2029.II Total of 1097 apartments
From $213,000
Completion in: 2027.IV Total of 210 apartments
From $743,000
Completion in: 2027.IV 108 units in total
From $157,000
Completion in: 2028.II Total of 5800 apartments
From $272,000
Completion in: 2029.II Total of 726 apartments
From $589,000
Completion in: 2027.IV Total of 291 apartments
According to the latest CBRE report, the average price of a flat in Abu Dhabi in March 2022 was 2,969 US dollars per square metre. The average price of a villa, on the other hand, was 2,409 US dollars per sqm. It is worth noting here that compared to Dubai there is less English-language analytics available where the Abu Dhabi market is concerned.
Residential property prices in Abu Dhabi have risen by 1,5 over the past 12 months by March 2022. At the same time, flat prices have risen by 1.6% and villa prices by 1.1%.
Average cost (per sqm) | Increase in value per year | Average cost (per sqm) | Average cost (per sqm) | ||
|---|---|---|---|---|---|
Flat in Dubai | 3,229 $ | +9.6% | Flat in Abu Dhabi | 2,969 $ | +1.6% |
Villa in Dubai | 3,832 $ | +19.8% | Villa in Abu Dhabi | 2,409 $ | +1.1% |
Rental cost
The rental cost in Dubai has risen by 19.1% over the past year. In May this year, the average annual rental price for a flat was 22,729 US dollars, while a one-year rent of a villa constituted an average of 67,976 US dollars, according to CBRE calculations.
$10,200 per week
6 bedrooms 12 guests
$8,500 per week
Total area 550 m² 4 bedrooms
Price on request
Total area 550 m² 4 bedrooms
$10,500 per week
4 bedrooms 8 guests
$9,800 per week
Total area 560 m² 4 bedrooms
$8,400 per week
4 bedrooms 8 guests
$2,350 per week
2 bedrooms 5 guests
$11,200 per week
5 bedrooms 10 guests
In Abu Dhabi in 2021, the average annual rent for a two-bedroom villa was 30,492 US dollars (or 2,541 US dollars per month), while three and four-bedroom villas were 36,481 US dollars and 57,172 US dollars respectively, according to ValuStrat.
The average annual rent for a one-bedroom flat in the capital last year was 13,885 US dollars (or 1,157 US dollars per month), and for a one-bedroom flat it was 21,780 US dollars. For two- and three-bedroom flats, the tenants paid 31,581 or 43,560 US dollars respectively.
Comparison of yields
Bayut Real Estate Marketplace has calculated the return on investment for villas in Dubai and Abu Dhabi for 2021. According to Bayut, the most profitable districts of the two cities are these:
District in Dubai | ROI, % per annum | District in Abu Dhabi | ROI, % per annum |
|---|---|---|---|
MBR City | 6.99 | Hydra Village | 6.90 |
Jumeirah Golf Estates | 6.77 | Al Reef | 6.27 |
DAMAC Hills | 6.56 | Al Raha Gardens | 5.91 |
Residence visas for investment in Dubai and Abu Dhabi
In both emirates, foreigners can obtain a residence permit for purchasing real estate: in the UAE such permit is called a residence visa. Dubai issues several types of residence permits for the purchase of real estate:
- A residence visa for three years for purchasing real estate for at least 205,000 US dollars, which can be renewed an unlimited number of times as long as the property is owned.
- A residence visa for five years, also known as a Golden Visa, for purchasing real estate for at least 545,000 US dollars.
As for Abu Dhabi, it offers only one residence permit program for investment. For purchasing real estate in Abu Dhabi, a foreign investor can obtain a Golden Visa for five years for a property worth from 545,000 US dollars.
Starting from September 2022, new legislation will come into force, and for an investment of $545,000 foreigners will be able to get a Golden Visa for 10 years instead of 5 years. It will be valid throughout the UAE and therefore applies to both Dubai and Abu Dhabi.
A residence visa is available for the investor’s family members as well: the spouse, sons under the age of 25, daughters of any age, if they are not yet married, and parents of the investor.
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