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The world’s millionaires are poised to spend nearly $800 million on homes in Abu Dhabi and Ras Al Khaimah.
High-net-worth-individuals (HNWIs) from around the world are willing to buy $796.8 million worth of residential real estate in the two emirates, with those interested in Abu Dhabi ready to spend $408.3 million and those looking at Ras Al Khaimah expected to set aside $388.5 million, new research from Knight Frank revealed.
The report is based on a survey of 317 HNWIs – 217 around the world and 100 based in the Gulf Cooperation Council (GCC) region. The respondents have a combined net worth of $5.4 billion and own 1,149 homes around the world.
Abu Dhabi
Among the HNWIs, 40% have plans to buy a home in Abu Dhabi for investment reasons, while 8% are keen on buying a property to use as their primary residence, while 15% are likely to buy a second home in the emirate, noted Faisal Durrani, Partner – Head of Research, MENA.
The significant level of investor interest in Abu Dhabi is due in part to the emirate’s “Visit Abu Dhabi” campaign.
According to Knight Frank, 50% of GCC-based expat HNWIs and 67% of global HNWIs with a net worth of more than $20 million indicated that they have been interested in visiting the city as a result of the global campaign of the Department of Culture & Tourism, Abu Dhabi.
Attractive price points in the real estate market have played a role in building up investor interest as well. Homes in the UAE capital sell for around AED 1,000 per square foot, making it about a third cheaper than Dubai, according to Shehzad Jamal, Partner – Strategy & Consulting, MEA.
“Residential values in Abu Dhabi have remained relatively stable for the last four years, which has played a significant role in encouraging domestic buyers to transition from renting to owning,” noted Jamal.
“International buyers too have become increasingly active, contributing to the rising deal volumes now being recorded in the emirate.”
Ras Al Khaimah
Knight Frank’s report also noted that Ras Al Khaimah is the fourth most likely property investment destination in the UAE for global HNWIs.
Nearly half (46%) of global HNWIs consider RAK more favourably because of the emirate’s economic transformation and growing level of tourism infrastructure. Among those with net fortunes worth more than $20 million, the figure climbs to 75%.
About a third (30%) of global HNWIs are poised to set aside $500,000 on property in RAK. Among those with a net worth of more than $15 million, 37% would be willing to spend $2 to $4.9 million in RAK’s real estate market, while a further 21% would be willing to spend more than $5 million.
A lot of these potential buyers are East Asian HNWIs, with 28% of them willing to commit to a budget of $2 million to $4.9 million to acquire a RAK residential property.
Expats in the Gulf have the lowest investment budgets at $700,000, while global HNWIs’ allocations range from $1.2 million for those with a net worth of less than $5 million. The figure climbs to $3.9 million among ultra-high-net-worth individuals, or those with a net worth of $20 million.
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