Dubai property investment has lots of advantages. Rental income is commonly over 6%, it has a high demand and the cost of development per square foot is favourable compared to other leading cities worldwide. Not only does Dubai provide a thriving economy it offers investment-friendly incentives such as no personal income tax, no annual property tax, low rental revenue tax and low Value Added Tax (VAT). Combine this with one of the world's safest locations Dubai is rapidly becoming the go-to place for investors and ex-pats.
Is Dubai real estate profitable?
Dubai properties benefit from two major investment factors: Low price per square foot and High Rental Yield. Dubai has become one of the most desirable places to live in the 21st century and you will see people are not afraid of investing in its real estate. Comparing the price per square foot to somewhere such as London or New York property in Dubai is a good place for real estate investors.
With the benefits on offer to Dubai residents and the demand for properties, Dubai will increase in popularity over the coming years which will mean one thing.... a rise in Dubai Property Prices. Add that to the growing demand to move to Dubai and UAE's open-for-work policies for migrants the long-term investment opportunities are clear.
Why should you buy property in Dubai?
Whether you want to build wealth or build a home, investing in Dubai is an excellent option and this article will give you an insight into the property in Dubai.
Return On Investment
How well an investment opportunity has performed can be calculated by ROI (return on investment). Investing in a property that delivers a healthy return rate is the goal. For a successful long-term investment, you need reliable returns. The value of the real estate in Dubai is also increasing year on year in cost per square meter. Some factors that affect ROI are
- Location
- Size of property
- Timing of purchase
- Market conditions
- Interest rates
- Facilities available in the community
According to statistics the ROIs of some popular communities were calculated to be:
Dubai Silicon Oasis yielded the highest gross return of 9.5% in 2019 closely followed by Meydan and DAMAC with 9.3% and 8.9% respectively. These statistics were for apartments. For townhouses and villas, Town Square secured the top position with a gross return of 7.8% followed by The Springs at 6.6%. Apartments provide better rental yield than villas and townhouses because of Dubai's low to mid-income population inclined toward affordable homes. These are still some of the most reliable rental yields in the world.
Risks of Buying Property in Dubai?
Buying a property in Dubai is a good investment, as many believe, but it comes with lots of risks.
Many risks associated with buying property in Dubai include:
- fluctuating oil prices
- currency exchange rates
- high cost of living
The Dubai property market is finally becoming a mature real estate market and has become the home for foreign investment. Oil Price was often linked to the value of the AED(United Arab Emirates Dirham) however the UAE government continues to diversify which should continue to strengthen the Dubai real estate market.
As mentioned above the currency exchange rates have long been linked to oil prices but as above the currency closely follows the US dollar which in 2022 is strengthening day by day. The AED is among the most stable currencies in the world today.
The high cost of living has often been seen as a risk to buying a property in the UAE however we have covered this in our Dubai Cost of Living Article.
Quality of Life
The government is constantly improving the employment system to attract world-class professionals and hence Dubai's real estate market would become even more profitable in the future. The environment is well respected internationally. The average living expenses are one of the benefits of buying compared to other cities, the first-rate facilities, excellent ratings in startups, no direct personal taxes, safety, and quality healthcare satisfy the residents. The Dubai government offers reliable legislation to protect real estate investment for buyers and developers. Since more and more people have their eyes set on Dubai, now is the time to buy. If you would like to read more about why Dubai click here.
Modern Architecture
A spectacular lifestyle awaits you in Dubai. The city is a haven for adventure seekers and architecture enthusiasts, boasting four of the world's tallest buildings, numerous hotels, and various stunning sights. Wide sandy beaches lined with pearl-colored water are perfect for sunbathing and other water-based sports. At the same time, desert safaris have become an increasingly popular activity with wildlife spotting tours taking you on the hunt for wild animals in their natural habitat.
An Active Nightlife
If you crave vibrant nightlife, great shopping, and breathtaking views, look no further than Dubai as that is precisely what you will get. Dubai property prices are skyrocketing at a phenomenal rate with no sign of slowing down.
Favourable tax conditions
Dubai is a no-tax state making it the most sought destination by both investors and residents. According to a recent report by Knight Frank and accountancy giant EY, ex-pats in Dubai are paying the lowest taxes on their purchases as compared to 15 other cities. If you would like to learn more about the cost of living in Dubai click here.
High rental yields
On average investors can achieve a gross rental yield of 5-9%.
Property visas
Now you can get a 3-year, 5-year, or 10-year visa which is renewed automatically. New laws have enabled investors to gain residence visa subject to certain conditions. Now foreigners can have 100% ownership of their businesses without the need of a national sponsor.
- To apply for a ten-year visa you must invest in public investment of at least AED 10 million.
- To apply for a five-year visa you must invest in a property in Dubai of the value of AED 2 million or more
- To apply for a 3-year visa you must invest in a property worth AED 750,000 or more
How to buy property in Dubai
Since foreigners have been allowed to buy property in Dubai, the market is in high business. Anyone of any nationality can invest in real estate in Dubai as long as it is in areas authorized by the Ruler of the Emirate of Dubai. Here is some information you need to know about investing in Dubai:
- Hire a trustworthy realtor: They will take you through a step-by-step process and make things easier for you to understand.
- Decide where you want to buy your property: Are you looking for a residence? Do you want to be in the heart of the city? Do open green spaces make you more comfortable or an apartment overlooking the sea is your lifelong wish? a Luxury Property finder can help.
- Freehold or leasehold: like every other city Dubai also offers property options. Rule out the pros and cons of both and see if free-hold (owning the property outright) or lease-hold( buying the lease of the property for a set time period) is better for you.
- Once you have finalized the property you are interested in, a Memorandum of Understanding is signed, and a deposit is paid. Then you apply for NOC. You can transfer the ownership of the property once you have obtained the NOC. All this usually takes about 30 days. Just pay the price and you will have a land deed in your name. You will also receive a residency Visa if the criteria above is met.
Hot spots for buying property in Dubai
Now that we have an idea of the advantages of investing in real estate in Dubai let's explore all the hot shot areas popular among investors. Propertyfinder.ae has been releasing extensive reports on where to invest money in Dubai and all the current popular market trends.
XPO 2020 Location
The expo 2020 has attracted a lot of attention. Its strategic location gives investors a chance to put their money in neighbouring communities. The Dubai Investment Park and areas adjacent to Al Maktoum International Airport have acquired the attention of many to invest in.
Dubai Marina
A glamorous neighbourhood that not only promises but also provides a luxurious lifestyle for you and your family.
A picture-perfect area consisting of magnificent skyscrapers, and commercial and residential areas, providing the best entertainment lies in wait for you.
- The average price for studios for sale in Dubai Marina is AED 754k
- 1-bedroom flats for sale in Dubai Marina are going for AED 1.2M on average
- A 2-bedroom apartment for sale in Dubai Marina cost AED 1.8M on average
- 3-BHK flats for sale in Dubai Marina average at AED 3M
Downtown Dubai
Home to some of the most renowned landmarks, The Burj Khalifa, The Dubai Mall, and the Dubai foundation, this area attracts investors like flies on fruit. Arabic low-rise architecture is present in the old town while high-rise buildings dominate the rest of the area. With its world-class amenities, unparalleled views and amazing recreational spots Downtown Dubai is a great investment for investors and homemakers alike.
An extravagant lifestyle is the appeal of Downtown Dubai.
Burj Khalifa has an ROI of 5.8%
The residences have an ROI of 5.54%
Palm Jumeirah
As its name suggests, Palm Jumeirah is built like a palm tree when viewed from above. It is a unique man-made island that offers visitors and residents everything they wish for. It is very popular among first-time buyers. You will find Dubai’s top luxury resorts on this island like The Palm, Atlantis, Five Palm Jumeirah hotel, Jumeirah Zabeel Saray, One and Only The Palm, and many others. Palm Jumeirah can be a great choice for a family vacation.
A laidback evening, or sailing around the Palm Jumeirah, having signature food, the majestic Burj Al Arab, all is at your disposal to enjoy.
You can read our guide on living on the Palm Jumeirah here.
Jumeirah Lake Towers
Another area to consider exclusively for apartments that offer an enviable environment is the Jumeirah Lake towers. They offer affordable apartments as compared to Dubai Marina with similar facilities.
JBR
Is promenading one of your favourite activities or are you looking for a buzzing tourist spot to invest in retail property? Then look no further than The Walk at Jumeirah Beach residence.
Set along the beachside and a dazzling hub for shops, restaurants, and hotels, it mesmerizes everyone by providing excellent dining, entertainment spots, and stunning views. Investing in real estate in JBR will surely be profitable.
Arabian Ranches
Arabian Ranches is considered one of the best communities for buying villas perfect for families. The neighbourhood boasts luxurious and spacious villas. It is a family-friendly neighbourhood famous for its gardens, communal pools, best school choices for children, sports courts, and play areas. Leisure destinations are just nearby. Dubai Miracle garden, the largest flower garden in the world is just a short drive from this community. The neighbourhood arranges various events and activities throughout the year to bring together the resident families.
Arabian Ranches continuously ranks among the top communities which isn't surprising considering the number of high-quality amenities available.
Villas in Arabian Ranches recorded a year-on-year 34.1% increase in property value.
The Lakes Dubai
The Lakes Dubai might be a perfect choice for you if you are looking for a peaceful and scenic community with detached townhouses. It is divided into six sub-communities: Ghadeer, Hattan, Maeen, Zulal, Deema, and Forat.
It is a safe and secure gated community built around lakes and rich in greenery. This community is popular for its tennis and basketball courts, football field, and many other family-friendly facilities. But if you are a working professional relying on public transport then this community may not be the right choice for you as it is far away from metro stations. But it provides an easy driving commute and interconnected sidewalks which is a plus point for its residents.
Emirates Hills
Inspired by the American Beverly Hills, this is one of the first communities providing freehold property in Dubai. It shares borders with The Meadows, The Springs, and The Lakes. In 2021 Emirates Hills ranked among the top buy luxury villas. This community houses many world-famous personalities so you might have a chance to run into your favorite celebrity. The famous Montgomerie Golf Club Dubai, an 18-hole golf course is available for golf enthusiasts. It is a gated family-friendly community with the best amenities.
You can view our Dubai Developments here.