Abu Dhabi vs. Dubai: Comparing Two Major UAE Real Estate Markets

Economic overview and impact on real estate

If we were to analyze the Abu Dhabi vs Dubai real estate market from a purely statistical lens, here are what recent figures demonstrate. 

According to Gulf Business, as of H1 2024, Abu Dhabi's real estate market saw significant growth, with record levels of foreign direct investment. They reported that not only did sales transactions grow, but many of the key Abu Dhabi communities saw price increases in the region of 5-10%.

In Dubai, Engel & Volkers H1 2024 Report, noted a 33% increase in sales transactions to 77,233, worth a total of AED 227Bn. Both sales volumes and prices hit record highs, with an average property price increase of over 17% year on year.

These statistics are reflective of one thing, which is the meteorological rise of transactions in both cities’ property markets. Both cities are not only attracting tourists from all over the world but also investors, entrepreneurs, business people, and salaried employees who want to capitalize on the booming economy and jobs market. 

The influx of people in both cities has launch the real estate markets to great heights, resulting in higher demand for all kinds of properties. So, be it Abu Dhabi vs Dubai, it is clear that both cities have robust real estate markets that display no signs of slowing down. 

Property market trends and price comparisons

The biggest comparison between Abu Dhabi vs Dubai living is the kind of properties one can avail of. In Dubai, while one can peruse a wide range of real estate (e.g. apartments, townhouses, villas), the luxury real estate segment is the most popular one as it attracts investment from around the world. For example, as of August 2024, a 1 bedroom apartment in Dubai would cost its buyer approximately AED 1.4m on average (according to Property Monitor) - though more affordable options are available.

On the other hand, Abu Dhabi’s real estate market has also witnessed a steady rise in investments and transactions, as the statistics prove. While the city’s range of luxury real estate may not match up to Dubai’s, Abu Dhabi is known for a variety of real estate options at more affordable prices for buyers. In comparison, a 1 bedroom apartment in Abu Dhabi would cost approximately AED 1-1.2 million on average.

Apart from real estate, factoring in Dubai vs Abu Dhabi’s cost of living is also important. While the cost of living for someone largely depends on their lifestyle, it is generally considered that Abu Dhabi is slightly less expensive than Dubai. 

Investment potential and ROI

As both cities are attracting more and more investors, an integral factor is the investment potential and ROI of real estate properties in both cities.

The ROI of investment properties in both Dubai and Abu Dhabi can vary significantly depending on factors like the location, property type and condition. But, in general, the investment potential in both cities is considered to be excellent.

In Dubai, gross rental yields typically average about 5-7%, with the overall ROI usually in the region of 6-8% per year, though there is the potential to make significantly higher returns.

Overall, the ROI for properties in Dubai is often considered to be slightly higher than that of Abu Dhabi, but it is important to note that along with property prices, the cost of living in Dubai is higher than in Abu Dhabi. 

Lifestyle and amenities

It is not simply about property prices and ROIs, but also about the lifestyle and amenities one may find in both cities. When it comes to Abu Dhabi vs Dubai living, understanding the lifestyle and amenities offered by both cities can greatly influence one’s decision. 

With regard to Abu Dhabi vs Dubai for amenities - it is safe to say that both cities offer various amenities that are required for a comfortable and enjoyable life. Depending on the neighborhood one buys a property in or resides in, one can avail of different amenities. Bear in mind that the basic amenities any property buyer should want in their neighborhood could include:

• Grocery stores 

• Spas and salons 

• Schools 

• Hospitals 

• Parks and gardens 

• Public transport facilities 

As for lifestyle, both cities have varied offerings that cater to different people. While malls, recreational facilities, and tourist hubs are present amply in both cities, Dubai is generally known for its vibrant lifestyle, modern architecture, and shopping malls. Abu Dhabi, on the other hand, is more popular for a more traditional experience, with more activities pertaining to culture, history, and the outdoors. 

Dubai vs Abu Dhabi comparison

While the Dubai vs Abu Dhabi cost of living and properties has been considered, there are other differentiating factors that can influence a homebuyer’s decision. Here are some other comparisons to research while weighing Abu Dhabi vs Dubai:

Population

Dubai’s population is said to be almost double that of Abu Dhabi''s. As of 2023, Dubai boasted a population of 3.4 million people while Abu Dhabi recorded a population of 1.5 million. Given that Dubai is much smaller than Abu Dhabi in size, it is a busier city with higher population density and more bustle.

In terms of people, Dubai has generally has a more cosmopolitan crowd. Abu Dhabi also has a highly diverse population, but it has a larger proportion of people from GCC countries.

Law

Real estate laws in both cities may be different but are equally robust. In Dubai, title deeds are mandatory for any real estate deal, be it in a freehold or leasehold area, or bought by a foreigner or national. In Abu Dhabi, Law Number 13 of 2019 now allows foreigners to own real estate in dedicated investment zones. 

Free zones

Cumulatively, Dubai has over 20 free zones which include the Dubai Multi Commodities Centre, Dubai Airport Free Zone, and Jebel Ali Free Zone which cater to a diverse range of businesses. From technology and retail to industrial manufacturing and startup zones, there is a free zone for almost every entrepreneurial or business venture. 

Abu Dhabi also boasts of several notable free zones such as the Abu Dhabi Global Market, the Khalifa Industrial Zone Abu Dhabi, and Masdar City. Be it media ventures, clean technology and renewable energy, or industrial work, there are diverse free zones for those wanting to set up a company in Abu Dhabi. 

Infrastructure

In the UAE, both the Dubai International Airport and Abu Dhabi International Airport are some of the busiest ones in the region. Dubai’s airport is one of the largest in the world and offers flights to over 270 global destinations - which makes it a major hub for international travel and commerce. Abu Dhabi’s airport provides travel options to over 120 destinations and is well-equipped to handle a growing number of people visiting the city for various purposes. 

Tourism

Post the pandemic, tourism has witnessed a massive spike in both cities. As of 2023, Dubai witnessed over 11.4 million visitors which contributed a grand total of AED 83.5 billion in revenue. Abu Dhabi also welcomed 4.1 million visitors - which marks a 24% year-over-year increase for the city. 

Conclusion: Choosing between Abu Dhabi and Dubai

In conclusion, Abu Dhabi vs Dubai, which is the better option? 

As discussed, both cities are well-known globally and offer a wide range of infrastructure, investment opportunities, amenities, and more to their residents and visitors.

However, it will gradually boil down to the kind of lifestyle you prefer and your job or business activities, as well as your budget for renting or buying a property (and whether you prefer paying upfront or taking a mortgage).

People who enjoy the bustle of a city and the vibrancy of its nightlife often opt for Dubai as an investment option. Those who are more budget-conscious and prefer a quieter, more traditional and laid-back lifestyle, opt for Abu Dhabi. 

Whether you want to buy a property in Dubai or Abu Dhabi, get the answer to all your real estate queries with Engel & Völkers Dubai at +971 4 422 3500.