Property in Dubai
It is good that in the stormy sea of instability surrounding us, which threatens to drown not only current incomes, but also savings, there are islands of calm and relative security. One of them is Dubai. Investments in local real estate allow not only to save, but also to increase capital and luxury real estate brokers in Dubai can help you with that. Today we will have a look at what the property market there is like, what are its pros, as well as touch on the nuances of buying and find out what privileges a homeowner in the Emirate receives.
Features of the UAE real estate market
The main feature of this seemingly small market is its constant and active development. Statistics from the DLD show that compared to January last year, in 2022, 76% more real estate transactions were concluded during the first month, and their total value increased by almost 2.5 times. And this is not just a random surge, but a steady trend. Thus, the growth in the number of transactions in the property sector in January 2021 was 15% more than in the same period of the previous year.
There are several reasons for this growth.
- First, opening for tourism in 2021. The UAE was among the first to actively receive foreign guests after the lockdown. As a result, investors from many countries began to actively invest in real estate in order to increase passive income.
- Secondly, recently many companies are actively transferring their business here. This is facilitated by the availability of an alternative currency and benefits on taxes and fees.
- Finally, the impact of Expo 2020 should not be underestimated. It started in early October 2021 and worked until the end of March 2022, seriously increasing the level of demand for renting and buying property.
Pros of buying real estate in Dubai
Having a home in the Emirates has its advantages and disadvantages. Let’s talk about why you should pay attention to the UAE property market.
1. Stability and security
Dubai has been one of the most secure places on the planet for quite some time now. At the same time, the government guarantees the observance of the rights not only of its citizens, but also of all visitors. And there are many of the latter in the city: according to the latest estimates, foreigners make up up to 85% of the urban population. And this is despite a rather strict migration policy!
- according to the English agency Legatum Intitute, the UAE is in 14th place out of 104 countries participating in the rating in terms of personal safety;
- a global survey conducted by the Gallup World Poll showed that 95% of residents feel safe on the street alone at night;
- in terms of the number of murders per 100,000 people, the UAE ranks second to last.
2. Acquisition cost
Although Dubai is both a popular resort and a developed metropolis, real estate prices even in popular areas here are still quite comparable to some of the European cities. So, if a square meter of business-class apartments in Europe will cost you about USD 2,700, a similar class property in Dubai will cost from USD 2,000.
3. Loyal tax policy
Once in the UAE, accustomed to income and property taxes and fees, Europeans and Americans are happy to discover that they simply do not exist here. This means that owning and renting real estate does not entail any financial obligations in relation to the government. Against this background, it is not surprising that the Emirates tax system is in 4th place in terms of attractiveness for business.
4. Fast return on investment
By investing in property in Dubai, you are guaranteed to recoup your investment, and in a relatively short time. The explanation is simple: a large flow of visitors, most of whom stay here for one or two weeks, generates a stable and high demand for rental housing.
Depending on the class of the apartment, its location and the size of the lease, you can receive up to 10% per annum, e.g., one of the most stable rental areas, Dubai Marina, has an average ROI of 6.4 percent.
At the same time, in the UAE it is customary to pay rent in advance and immediately for the entire period. The use of bank checks, the use of which without collateral is considered a criminal offense in the country, minimizes the risk of non-payment.
As part of real estate management, it is worth noting that despite the growing relocation of businesses to the emirate, the demand for office space is lower than for housing. But even retail space, subject to a good location, can bring up to 15% per annum.
Last but not least, the attractiveness of Dubai real estate is due to weather conditions. It is almost always sunny here – 345 days a year, and the Persian Gulf is always gentle and warm (its temperature never drops below +25), storms are very rare. Beautiful sandy beaches and excellent infrastructure attract not only tourists.
However, those who decide to move to the UAE for permanent residence should take into account that it is quite hot here. The average summer temperature is +40, rains are very rare. The average annual rainfall is only 120 mm.
6. High quality of life
Real estate in the Emirates is also attractive because it is very comfortable to live here. In Dubai, there are many various trading platforms, restaurants, business centers. The developed entertainment industry is organically complemented by a well-thought-out transport network, including unmanned subway cars. The quality of the roads is a topic for a separate article. Let’s just say that the condition of the roadway is carefully monitored, and interchanges are thought out to the smallest detail.
The Legatum Institute even recognized the UAE as the most comfortable country in the Arab world for permanent residence. At the same time, the government is implementing the Dubai 10X program, which implies that in the future the city will be ahead of its closest competitors in development by at least 10 years.
Real estate agency in Dubai
Ax Capital agency will help you purchase real estate in Dubai, working along with you on the every step of the deal. Check out their website for the latest offers.