Sitting on the northernmost part of the United Arab Emirates is Ras Al Khaimah. Boasting a rich history spanning 7,000 years, this picturesque emirate remains a significant economic growth driver for the UAE. One particular aspect is Ras Al Khaimah’s real estate sector.
Robust rentals
According to Bayut’s RAK Annual Market Report for 2023, the real estate market in Ras Al Khaimah is booming. Rental prices for apartments in popular neighborhoods have surged by 10.5 percent year-on-year. Meanwhile, villas have experienced a 9.37 percent YoY increase in rental costs.
The upscale Al Hamra Village has emerged as a preferred choice for renters. It posted an average rent increase of up to 11 percent for flats. The average rental cost hovers around AED 37,000 for a one-bed unit. On the other hand, a two-bed unit is priced at AED 53,000.
In terms of sales, the figures also show an upward trend. Specifically, apartment sales prices have increased by 18.5 percent YoY. Moreover, the sales prices of villas have increased by 3.55 percent compared to the previous year.
Sale prices, also upward
Furthermore, the annual report indicates that Al Hamra Village stood out as the preferred location for purchasing apartments in the emirate. The average price per square foot increased from AED 587 in 2022 to AED 633 in 2023. This reflects a 7.84 percent rise. On average, one-bedroom apartments were priced at AED 533,000. Two-bedroom and three-bedroom units were listed at AED 848,000 and AED 1.58 million, respectively.
On the other hand, the average price per square foot for villas for sale in the area rose from AED618 to AED 640. Meanwhile, a three-bedroom villa in the area cost investors an average of AED 1.57 million. Buyers of four- or five-bedroom units paid about AED 2.32 million and AED 8.13 million, respectively.
Properties on Al Marjan Island, Mina Al Arab, Al Nakheel and Al Dhait are also among the most in demand.
Strategic location, diverse economy
What makes Ras Al Khaimah a burgeoning real estate haven? Besides its relatively lower prices, it boasts a prime location and a robust economy.
Situated at the crossroads of Europe, Asia and Africa, Ras Al Khaimah is within a four-hour flight of one-third of the global population. This strategic positioning has established the emirate as an optimal hub for businesses seeking access to the UAE, the Middle East and surrounding regions.
Aligned with the national agenda, Ras Al Khaimah is dedicated to economic diversification and reducing dependence on oil. Notably, no single sector in the emirate contributes more than 30 percent to the overall GDP. According to S&P, the emirate’s GDP growth is projected to average 2.7 percent annually from 2022 to 2025.
Contributing to Ras Al Khaimah’s economic vitality is the facilitation of business operations. The Ras Al Khaimah Economic Zone comprises five zones accommodating over 21,000 companies from 100 countries and 50 industries. These zones offer 100 percent tax exemption and foreign ownership, with convenient access to both Ras Al Khaimah International Airport and the seaport.
More projects to rise
In August 2023, His Highness Sheikh Saud bin Saqr al Qasimi, Ruler of Ras Al Khaimah, issued Decree No. 12 of 2023.
The decree encompasses significant elements, including the establishment of the Real Estate Project Development Committee and the introduction of two registers. First is the Real Estate Development Register. It ensures the financial capability of entities engaging in real estate development in the emirate. Second is the Real Estate Development Projects Register. It facilitates the official registration of new development projects before the commencement of any infrastructure or construction work.
The decree signifies the government’s strong commitment to enhancing the real estate sector, and strategic developments of this nature are yielding positive results.
In February, Range Ras Al Khaimah, a prominent real estate developer in the UAE, entered into a partnership with Marjan, a leading developer of freehold properties in the emirate, to undertake three new developments.
“We see great potential in Ras Al Khaimah. It has all the attributes we like to see – a robust and diversified economy,” said Mohammed Asaria, managing director and board member at Range Developments.
Read: Upcoming infrastructure projects transforming the UAE in 2024
Influx of investments
Additionally, the upcoming launch of the beachfront casino resort, Wynn Al Marjan Island, in 2027 is expected to attract a greater number of prospects. The “Wynn effect” could potentially boost Ras Al Khaimah’s entertainment sector, extending its positive impact on the tourism and real estate sectors.
This development further enhances Al Marjan’s already thriving real estate scene, with the average return on investment for an apartment on Al Marjan Island standing at 5.75 percent. This figure positions it among the highest in the emirate, with Yasmin Village taking the top spot at 11.8 percent. In comparison, the net yields for apartments in Dubai averaged around 6 percent in 2023. This contrast highlights Ras Al Khaimah’s appeal as a compelling alternative for investors seeking robust returns.
Commenting on Ras Al Khaimah’s potential as an investment hub, Bayut CEO Haider Ali Khan said, “The government’s proactive measures, strategic initiatives and vision for sustainable growth continue to position the emirate as an investment destination of choice in the region.”
With ongoing strategic initiatives and the influx of significant projects and investments, Ras Al Khaimah’s real estate sector is poised for a future teeming with opportunities.
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