- HNWIs plan to invest nearly $800 million in residential real estate in Abu Dhabi ($408.3 million) and Ras Al Khaimah ($388.5 million).
- Abu Dhabi attracts 40% of HNWIs for investment properties and 15% for second homes, driven by the “Visit Abu Dhabi” campaign.
- Abu Dhabi’s real estate prices, around AED 1,000 per square foot, are significantly cheaper than Dubai’s, with stable values over the past four years.
- Ras Al Khaimah, the fourth most favoured UAE investment location, attracts 46% of global HNWIs, especially those worth over $20 million.
- Many potential buyers in Ras Al Khaimah are East Asian HNWIs with substantial investment budgets, reflecting the emirate’s economic and tourism growth.
High-net-worth individuals (HNWIs) from across the globe are set to invest nearly $800 million into the residential real estate markets of Abu Dhabi and Ras Al Khaimah.
Recent research from Knight Frank reveals that these affluent investors plan to spend $796.8 million, with $408.3 million earmarked for Abu Dhabi and $388.5 million for Ras Al Khaimah.
Abu Dhabi: A Prime Investment Hub
Abu Dhabi has emerged as a key destination for HNWIs, with 40% of them planning to invest in homes primarily for investment purposes.
Additionally, 8% aim to purchase properties for their primary residence, while 15% consider acquiring a second home in the emirate. Faisal Durrani, Partner and Head of Research for MENA at Knight Frank, attributes this interest to the emirate’s proactive “Visit Abu Dhabi” campaign.
The Department of Culture & Tourism’s global campaign has significantly boosted Abu Dhabi’s appeal, with 50% of GCC-based expat HNWIs and 67% of global HNWIs worth over $20 million expressing interest in visiting the city.
Attractive real estate prices further fuel this interest, with properties in Abu Dhabi selling for around AED 1,000 per square foot, roughly one-third cheaper than in Dubai.
Shehzad Jamal, Partner in Strategy & Consulting for MEA, notes that the stability of residential values in Abu Dhabi over the past four years has encouraged many domestic buyers to transition from renting to owning.
This trend has also attracted international buyers, contributing to the rising transaction volumes in the emirate.
Ras Al Khaimah: An Emerging Investment Destination
Ras Al Khaimah (RAK) is gaining traction as the fourth most favoured property investment location in the UAE among global HNWIs.
Nearly half (46%) of these wealthy individuals are drawn to RAK due to its economic transformation and burgeoning tourism infrastructure.
The appeal is even stronger among those with net fortunes exceeding $20 million, with 75% viewing the emirate favourably.
A significant portion of global HNWIs, about 30%, are prepared to allocate $500,000 for property investments in RAK.
For those with net worths above $15 million, 37% are willing to spend between $2 million and $4.9 million, while 21% are open to investing over $5 million in RAK’s real estate market.
Notably, a considerable number of potential buyers are East Asian HNWIs, with 28% ready to budget $2 million to $4.9 million for a RAK residential property.
Investment budgets among expats in the Gulf are comparatively lower, averaging around $700,000.
In contrast, global HNWIs with net worths below $5 million plan to invest about $1.2 million, while ultra-high-net-worth individuals, those worth over $20 million, aim to spend approximately $3.9 million on RAK properties.
Comprehensive Survey Insights
Knight Frank’s report is based on an extensive survey of 317 HNWIs, which includes 217 individuals from around the world and 100 based in the Gulf Cooperation Council (GCC) region.
Collectively, the respondents possess a combined net worth of $5.4 billion and own a total of 1,149 homes globally.
This extensive pool of affluent individuals provides a robust foundation for the insights presented in the report, reflecting significant trends and preferences in the high-end real estate market.
Factors Driving Investment
Several factors drive the robust investment interest in Abu Dhabi and Ras Al Khaimah. Both emirates offer attractive real estate prices and a stable market environment.
The extensive promotional efforts by the Department of Culture & Tourism have significantly enhanced Abu Dhabi’s global profile, drawing in a large number of affluent international buyers.
Moreover, the economic and infrastructural developments in Ras Al Khaimah are making it an increasingly attractive destination for HNWIs looking for promising investment opportunities.
The emirate’s growing tourism sector and its strategic initiatives to bolster economic growth are appealing to wealthy investors seeking to diversify their real estate portfolios.
Altogether, the substantial interest from HNWIs in the residential markets of Abu Dhabi and Ras Al Khaimah underscores the growing allure of these emirates as prime investment destinations.
With nearly $800 million poised to flow into their real estate sectors, these regions are set to witness a significant boost in their property markets, driven by a blend of attractive pricing, stable market conditions, and strategic promotional campaigns.
This trend reflects a broader confidence among the world’s wealthiest in the potential of Abu Dhabi and Ras Al Khaimah to deliver solid returns on their real estate investments.
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Last Updated on June 11, 2024 by Safiya K
