Buying real estate in Abu Dhabi

Buying property in Abu Dhabi
Updated 2021-11-10 07:38

The United Arab Emirates has 8.4 million expats, and most of them spend about 30-50 years in the country before retiring back home. Some even consider the UAE as their second home, thus considering buying instead of renting. Here is what you need to know about buying property in Abu Dhabi as an expat.

One of the most substantial expenses for an expat in the country is accommodation, which costs about 50,000 UAE dirhams and above per year. Rent usually accounts for 40 per cent of an expat's monthly income.

While expats are allowed to buy property in the UAE, most veer away from it because of lengthy procedures, high down payment rates, job security, delay in handover of properties and uncertainty whether they are willing to stay for the long term or not.

Who can buy property in Abu Dhabi?

As of 2019, expats can buy freehold property in Abu Dhabi provided it's located in one of the “investment zones” in the emirate. These zones include:

  • Yas Island
  • Saadiyat
  • Reem
  • Mariya
  • Lulu
  • Al Raha Beach
  • Sayh Al Sedairah
  • Al Reef
  • And Masdar City

Buying property on freehold means that you get full ownership of said property. You can make any alterations that you see fit, rent it out or sell it. Properties may include villas, townhouses and flats.

Before 2019, expats could only buy properties on leasehold in Abu Dhabi. Leasehold properties are leased out for a long term (up to 100 years).

Cost of properties

The cost of a property depends on location, the developer, what type of property it is (high end, low end or mid-end) and whether you are buying it presold or when it has already been built. One must remember that the advertised rates of properties for sale usually exclude bank fees, commission or other governmental fees that add up to the actual cost.

How to buy a property in Abu Dhabi?

Once you have decided on a property, a Memorandum of Understanding between buyer and seller is drawn up and signed. The buyer has to pay 2% of the value, which will go to the real estate agency and another 2% to Abu Dhabi Municipality (to transfer property to you).

An ownership certificate is then issued from the developer, and a fee of AED 5,000 is required to be paid to them as an administrative fee. Compared to Dubai, it is much easier to buy in Abu Dhabi because the regulations only involve the municipality and developer.

Is it more practical to buy or rent?

This is a common argument among those who want to weigh their options of buying instead of renting. For those who have made up their minds to stay in Abu Dhabi for a long time, even after retirement, buying is definitely for them. At the end of 20 years, they are able to pay less for buying than renting for the long term. After they have fully paid off their mortgage, they can sell and receive their Return of Investment, which makes a good point to consider when buying. Aside from that, they can also choose to rent the property out should they decide to do it while helping to pay off their mortgage.

More and more expats are choosing to invest in properties in the UAE because through the years it has become easier for them to do so. Developers have also opened up opportunities for mid-end properties to be up for grabs, which sell at a rapid pace, especially in Dubai because it is considered as a lucrative investment.

Owning a property in Abu Dhabi or any other city in the UAE comes with high financial pressure, especially when one is not sure about job security. It is essential that you have thoroughly considered this, as well as your financial status before investing.

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