In a context where global wealth continues to grow despite economic challenges, the’interest in property investment to exotic destinations is on the rise. According to Knight Frank’s annual ‘Destination Dubai 2024’ report, Abu Dhabi and Ras Al Khaimah are emerging as key destinations for high-net-worth individuals (HNWIs). This article explores current trends and the underlying reasons for this influx into the luxury property market in these regions.
Interest in Abu Dhabi
The rise in popularity
The report reveals that a considerable number of HNWI shows a moderate interest for the purchase of property in Abu Dhabi, with 23 % expressing a desire to do so. This figure becomes even more impressive when one considers that 57 % of those with a personal wealth in excess of 15 million dollars are looking to purchase a property in the capital of the United Arab Emirates. This trend is strongly influenced by the success of the ‘Visit Abu Dhabi’ campaign, which has captured the attention of 67 % of global HNWIs who own a a net worth of over 20 million dollars.
Motivational factors
Among the main reasons for this growing interest are:
- The affordability of property in Abu Dhabi, which is cheaper than Dubai.
- A positive influence from the advertising campaigns organised by the Abu Dhabi Department of Culture and Tourism.
- The prospects for’investment and the potential growth of the property market in the region.
Reasons for buying a property
Investment or main residence?
According to Faisal Durrani, Partner and Head of Research at Knight Frank MENA, 40 % of the High-net-worth individuals are considering buying property in Abu Dhabi, mainly for investment purposes. Furthermore, 8 % are interested in acquiring a principal residence, whilst 15 % are considering buying a second home.
Key areas of interest
Abu Dhabi stands out as the most sought-after area for property purchases amongst HNWIs, although it is not designated as an investment area for international buyers. This preference highlights the island’s unique appeal, not only for its investment opportunities but also for its exceptional quality of life.
The appeal of Ras Al Khaimah
A viable alternative
Ras Al Khaimah (RAK) is gradually emerging as a an attractive destination for high-net-worth investors across the world. Ranked as the fourth most sought-after destination for property investment in the United Arab Emirates, RAK is particularly appealing to HNWIs thanks to its tourism and hospitality services.
Financial requirements
Unlike Abu Dhabi, the global high-net-worth individuals appear more inclined to invest smaller sums in property in RAK. Around 30 % of global HNWIs are reportedly willing to spend up to $500,000 on property in this region.
General trends in the property market
Alongside property trends, initiatives that adhere to the principles of Islamic finance, particularly those included in the S&P 500 Sharia Index, have significantly outperformed the broader market over the last ten years. This may suggest a stable and promising growth for investments that comply with Islamic law, thereby offering new opportunities for high-net-worth individuals seeking to diversify their portfolios.
In light of the analysis provided by Knight Frank, it is clear that the’interest in property in Abu Dhabi and Ras Al Khaimah continues to grow amongst high-net-worth individuals. The unique combination of affordability, investment potential and effective promotional campaigns is helping to establish these regions as must-see destinations for the world’s wealth. Whilst these markets continue to grow, they could offer new lucrative opportunities for experienced investors.
