Dubai’s real estate market is becoming an attractive proposition to a multitude of international investors.
According to data from the Dubai Land Department (DLD), released by its Real Estate Research and Studies Department, total investment transactions for the first half of the year reached Dh57 billion from 26,000 investors made up of 149 different nationalities.
Leading the property investors were buyers from the GCC, contributing Dh22bn to Dubai’s property market covering 8,000 transactions, just over a quarter of the total number. Of this, Emirati investment provided the lion’s share, with total transactions reaching Dh14.5bn from 4,543 investments, while GCC investors made up Dh7.5bn from 3,656 transactions.
While Dubai’s real estate market has suffered a string of calls in recent months citing its bottom, the DLD data suggests many still see opportunity in it.
The total value of foreign investment into Dubai property reached more than Dh28bn, almost half the value of transactions, drawn from more than half of the investments – 14,314 investments out of the 26,000 were from foreigners
Dubai Investments has 46 subsidiary companies, over 23,500 shareholders, and paid-up capital of AED 2.1 billion.
It is the largest investment company listed on the UAE stock exchange, and invests in “viable and profitable companies”, according to its web site.
1. NO PROPERTY TAXES Government regulation and transparency have continued to drive investor confidence for the ever changing Dubai real estate landscape.
Key government initiatives include the mortgage cap of 75% loan to value (LTV) for first time expat buyers for properties
less than AED 5 million and the increased transfer fee from 2 to 4%. Investors should also know residential property
sales and leases will be exempt from value added tax (VAT) in the UAE which takes effect from January 2018.
2. IMPROVED INFRASTRUCTURE The run-up to Expo 2020 is estimated to create about 277,000 new jobs with a reported
investment of 25 billion dirhams in infrastructure related projects. Whilst the Dubai Expo 2020 is all about
generating sustainable solutions to global problems, one immediate benefit of the expo is it highlights the fact
Dubai is an attractive, secure and stable place for big business and real estate investors. The government’s
initiative at making it a ‘Smart City’ is one to look out for. Dubai is trying to be at the forefront of technology
with the advent of transportation solutions such as ‘Hyperloop’ and driverless cars. It’s a city that looks to
the future. The government also takes an active interest through its ‘Happiness’ initiative – this includes
the happiness of both the expats as well as the locals. The new areas to look out for in terms of real estate.
include Dubai Creek Harbour and Dubai Hills which are master development projects.
3. GREAT RENTAL RETURNS
Attractive rental returns are still available in Dubai even in what has been considered a difficult year for real estate, but you must know where to look. The best rental yields in the UAE can be found in emerging communities like Dubai Silicon Oasis; where apartments are achieving 9%. Dubai Sports City was another great performer with 8.9% returns and areas like Al Furjan, International Media Production Zone & Jumeirah Village Circle all offered competitive returns of 8.5% or more. Whilst these developments aren’t fully complete, they have continued construction schedule for the coming years these returns would be attractive to any serious international investor. Investors that have put in more than AED 1 million (approx. US$ 272,265) are eligible to apply for a residence visa in the UAE. You can browse through Luxhabitat’s rentals here to get an idea of rent rates across different properties and areas.
4. SAFETY AND STABILITY Dubai’s unique geographical position and connectivity gives it easy access to various destinations in Africa, Europe and the Rest of Asia. This may be perhaps the reason why Dubai is rapidly becoming home to more Ultra High Networth Individuals around the world as well as massive companies such as Snapchat. Developers know the number of high net worth individuals based in the UAE increased by 70% over the last decade. A 2017 recent Knight Frank report has ranked Dubai fourth in the world on its list of cities with the biggest inflow of high net-worth individuals. Simply put, Dubai is a global heavy weight. Everyone wants a piece of our pie because they know as an investment hub Dubai offers the most attractive and stable platform in the world to do business with. The knock on effect of this is that High Networth Individuals (HNWIs) and entrepreneurs prefer Dubai over historically popular places like
Monaco, London, Hong Kong or New York City. It must also be noted that Dubai’s standard of living is still lower than these cities.
5. A TRANSPARENT REAL ESTATE AUTHORITY Since 2006, the government has allowed foreign ownership in free hold areas. The Real Estate Regulatory
Agency or RERA as it is called has made vast improvements in improving the transparency of real estate market and to properly gauge the health
of a budding market. It is a government entity that has made vast leaps in terms of technology through its broker’s app as well. According to the
Dubai Land Department, 149 nationalities were involved in over 26,000 transactions totalling 57 billion dollars for the first half of 2016.