Imagine a place where the stock market is up over 100% in one year and where an entire neighborhood of undeveloped houses sells out in 45 minutes… Hard to believe such a place exists in today’s economy? Well, believe it — it’s Abu Dhabi.
In the past, many people in Abu Dhabi were presented with small plots of land when they were children. However, with the gift came a clause — they were not allowed to sell the land.
That is, they were not allowed to sell the land until early this year, when the state began loosening its grip on the economy. The state still rules politically, but there is a clear separation between the past and the present when it comes to the economy.
Not long ago, banks in Abu Dhabi were often controlled by the government, and they were definitely not “banks” as we know them to be here in North America. They were fragile. Property markets and equity were almost unheard of, and the economy remained state-controlled while oil prices surged — this despite the fact that the Gulf countries hold approximately two-thirds of the oil reserves in the world.
However, now, with new property policies and a looser government grip on the economy, Abu Dhabi homes that are not even built yet are selling out in record time, while there are lotteries and waiting lists for other, as yet undeveloped, land.
Until this past spring, residents could not sell property and those outside could not lease any land. This ban was lifted, and sales have soared.
In the past, all land transactions were written in a bung book. Now a computer system is in the works to track these dealings. Despite the chaos that is occurring in Iraq, this emirate is seeing a boom in markets and businesses across the area thanks, in part, to petrodollars.
Currently, many of the oil exporting nations have money in U.S. and European securities, but they are in the process of looking at ways to keep some of their money in their own land as well. As it stands at the moment, the United Arab Emirates are just as well off as the United States on a per capita basis. As I said earlier, the stock market in Abu Dhabi has soared by over 100% this year alone.
In addition, there is no shortage of crude oil in the next century and with the increasing cost of oil, these nations are only poised to get wealthier.
As the land registry office in Abu Dhabi struggles to keep up with property sales, residents should enjoy the rewards of living in one of the few places in the world where real estate will continue to explode in price and in demand for some time to come as the economy continues to grow.