Abu Dhabi is the capital and oil rich state of UAE. What do you think is the reason that the price of real estate in Dubai has historically been higher than that of real estate in Abu Dhabi?
Well that's not the case anymore, property price in Abu Dhabi are now as high as Dubai if not more and the market in Abu Dhabi is much more stable as compared to Dubai.
Initially the real estate boom started from Dubai and as a result there was a marked difference in the prices between the two Emirates. Abu Dhabi was a late starter, however it took Abu Dhabi literally no time to catch up with Dubai.
Your analysis is quite correct, as Abu Dhabi is an oil rich state with its national reserves much much higher than Dubai therefore the real estate market in Abu Dhabi is not only more stable, the demand there is still higher than the supply and lastly in case of a crisis the market will always have a backup by the government and can be injected with billions of dollars to bring stability.
I guess the main reason is investment in the real estate sector. Dubai's oil reserves were diminishing therefore it needed to invest in the real estate sector so that it could generate revenue from travel, tourism and business. Whereas Abu Dhabi was oil rich and it did not need to invest in real estate sector to support its economy that is why less attention was given to real estate development work and innovative projects in Abu Dhabi.
Though they started the investment in real estate quite late as compared to Dubai, still they have managed to come up to Dubai's level. All because they are oil rich and their economy has strong financial backing as said by Mr. Zeeshan.
As Mr. Zeeshan said that this situation is no more there because many huge developers are working in Abu Dhabi right now and its economic condition is much more stable than Dubai.
Well I think the boom in tourist industry, great business opportunities and increased foreign real estate investment in Dubai are a few factors which continue increasing its popularity as compared to other Emirate states. We can say that Abu Dhabi comprehended the reality a bit late and they did not attract the foreigners to invest in their real estate and relied on their oil reserves extensively. But now Abu Dhabi is not behind Dubai and is competing with it at almost same level.
Very true, indeed. Diversification hasn't been amongst the top priorities of the oil rich nations. Now they recognize the ability of growing economically by introducing newer sectors into their economies. Earlier these oil rich countries were relying on the economic model of earning from oil exports only. Dubai realized it earlier to break away from this traditional way of earning from oil because of its fast depleting oil reserves. Others are now following suit in GCC by investing into tourism, service & manufacturing concerns to diminish their dependence on oil reserves alone.
Hi,
This is true that now both Abu Dhabi and Dubai are competing head to head. Abu Dhabi has built up a huge budget surplus over the past few years. Both emirates are competing to become the market leader, Abu Dhabi own growth plans could benefit from slowdown in Dubai.
Dubai real estate sector, formerly the jewel in its crown is facing problems in this sector and Abu Dhabi relying on its oil revenues is also a problem as the oil prices fluctuates rapidly. But the development plans in Abu Dhabi are paving the ways for something long lasting.
So, for me both have an equal opportunity to grow.
(5 Answers)
