Investing in real estate in the UAE – why is it advantageous?

2024-02-01
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Businessmen and investors are choosing Dubai to invest their money into real estate. We will tell you more details about this lucrative market and present some up-to-date information on conditions, prices, popular objects, and overall trends.

Why is it profitable to invest in Dubai real estate?

It is common knowledge that Dubai is progressing quickly in terms of numerous life aspects. It possesses a very vast, flourishing real estate market, and lots of buyers have rushed here. Investors are convinced that owning local property will result in good profits. So, let's find out why it is profitable to invest into Dubai.

To begin with, one can rent and receive good rental income or benefit from resale. Secondly, taxation policy is mild and favorable. Thus, it provides a very comfortable environment for the growth of richness and secure opportunities for investing.

It should be marked that the rental market in Dubai is very steady and gives a high return on investment. So, it's appealing for those striving to invest in order to receive a good income stream. It is caused by growing population, flows of expatriates, flourishing tourism. Ultimately, the trend leads to constant demand for rental properties. Moreover, rental yields are higher here – 6%-8%.
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Additionally, it is a reasonable long–term investment strategy. It represents a brilliant chance for real estate investors, as Dubai has strong economy, business-friendly environment and perspectives for development.

Who buys real estate in Dubai and why

Dubai is nowadays so popular in terms of purchasing real estate among different peoples and nationalities. Especially, Dubai charms businessmen, celebrities, bloggers with its unique mixture of luxury, beauty, service, comfort, culture, taxation benefits, interesting travel destinations, convenient geographical location, etc.

Statistics say that Indian, British, and Russian nationals were the largest buyers of Dubai real estate in 2023.

Celebrities and bloggers prefer to obtain real estate, since they are seeking for comfort, luxury and fashionable infrastructure. Palm Dubai is very popular among worldwide business magnates and Hollywood stars. They enjoy relaxing in such frequently visited spots as the Dubai Marina, Palm Jumeirah, and the Burj Al Arab.

Actor Shah Rukh Khan bought a house in Palm Jumeirah, Shilpa Shetty – a villa, David and Victoria Beckham - in the Burj Khalifa. Brad Pitt and Angelina Jolie, Madonna, Giorgio Armani, Tom Cruise among others own property in Dubai, too. Apart from that, some bloggers are also heading for Dubai for residence. They explain their choice by saying that Dubai has become a hub for social media influencers. Indeed, Dubai possesses the spirit of business, innovation, new ideas and inspiration. Besides, it is marked that there are much more opportunities for content creation, since Dubai represents a luxurious spot with stunning views, modern architecture, beautiful skyscrapers, fascinating business centers. Also, influencers are more likely to find beneficial collaborations in Dubai, make sponsored content and get engaged in brand partnership. Thus, such bloggers as the former TV personality and blogger Chloe Lewis, digital creator Laura Anderson, the star of “Mean Girls” and influencer Lindsay Lohan and others moved to Dubai.

Popular types of real estate

There is a big range of property types in Dubai and different prices for any budget - from luxury villas to inexpensive apartments.

They include:

  • studio;
  • apartment;
  • penthouse;
  • townhouse;
  • villa.

The most common variants are studios, 1 or 2-bedroom apartments.

Where is the ideal place to invest

Dubai’s real estate market is much more effective and lucrative than that of Western European countries. Some districts have even become very popular among purchasers and investors.

In accordance with some data, the best locations for selling apartments are Business Bay, Downtown Dubai, Dubai Marina, Palm Jumeirah. The tendency is renting out for short terms, since these areas are very appealing to tourists.
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Popular areas among rental clients include Dubai Hills, The Greens, Creek, as well as Jumeirah Lake Towers (JLT).

Studio at Business Bay will cost around 870,000 AED, while apartment – 1,333,000 AED. A studio at Downtown Dubai and Dubai Marina will cost about 1,250,000 AED, apartment – 1,800,000 AED. Undoubtedly, prices differ. Average prices for a studio in Dubai ranges around $260,000 (about $3,000 per square meter).

Properties in such areas as Dubai South offer brilliant opportunities for long-term investments, because these areas are expected to experience huge growth soon.

How long will the investment pay off

There're two purposes of people’s buying real estate in Dubai – to live or to invest. If for investment, people usually have a goal to rent an apartment for a particular period of time, especially when they are not in Dubai. There are people who rent an apartment for a month, some wait for a rise in price and rent it daily – this is a more profitable alternative and a very frequent case. But, a renter needs to get a license for daily rent.

What is of particular significance is that the Dubai real estate market provides profitable investment opportunity for those who are searching returns on investment. Average return here is from 5% to 8,4% per year. Normally, it takes approximately 8 years for the investment to pay off.

Apart from renting, some people prefer to resale property to gain immediate rental income.

Advantages of investing into real estate in Dubai

The law in the UAE gives the feeling of confidence and protection, so investors trust and invest their money without worrying about future.

It should be pointed out, that Dubai isn't only a stunning tourist and business center, but also a place that possesses brilliant and convenient infrastructure, that provides good conditions to move from major directions. The location makes it comfortable and rather quick to come from different countries and return.

Furthermore, a lot of people are attracted by the climate here: there is summer during almost all the year. Dubai is indeed the best place for lovers of hot sunny weather. So, instead of staying in hotels when coming for a vacation, it's more advantageous to buy an apartment and rent it out while you are going back to your hometown.

We should not disregard the fact that Dubai possesses top developers that pay attention to quality, modern designs, style during construction. On top of that, many developers have energy-efficient and environmentally friendly projects. This everything is of utmost importance in terms of sustainability. Investors appreciate these trends a lot.

When making up your mind about this topic, you should consider all the aspects relying on a comprehensive and thorough analysis. That’s why One World Migration is here to help you make an informed and right decision.

You are welcome to learn about our actual programs here - https://oneworld.id/programs/uae-en/.

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