Why is it still a good time to invest in Dubai real estate?
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Besides being famous for its gold and oil, Dubai is the land of magnificent structures with massive architecture which makes it an eye candy of tourists and investors.
Not only the business hub, but the residential estates are also quite alluring.
If you have been dreaming of owning your own home in Dubai, this year could be yours. With local housing market at the bottom line, you can avail a bargain.
What makes Dubai a profitable real-estate investment destination, despite the 2017 fall?
Let’s take a look at the major reasons behind the market boom.
An Attractive Return on Investment
The Dubai property sector’s evolution is greatly driven by overseas investors and foreign nationals residing in the UAE.
The Dubai Land Department (DLD) observed over 69,000 property dealings with a combined value of over $77 billion during 2017 with 65 % of foreign investments by volume. The inclusive worth of the land dealings of Dubai accounted is higher than the Gross Domestic Product (GDP) of 144 countries identified by the United Nations.
As much as 23,000 non-GCC and non-Arab foreigners transacted 30,000 property deals worth almost Dh56 billion whereas over 9,000 Gulf nations were engaged in more than 14,000 dealings worth over Dh37 billion. Approximately, 7,000 non-GCC investors concluded over 8,000 property transactions of Dh14 billion.
The highest number of foreign investments were made by Indian nationals with over Dh15 billion, followed by Saudi nationals with property investments of over Dh7 billion. Pakistanis and British nationals investments in real estate accounted for Dh5 billion and Dh6 billion respectively. Chinese, Egyptians, Canadians and Jordanians showed a growing contribution in the Dubai real-estate as well.
Such brilliant figures clearly demonstrate why Dubai is still the best place to invest in your real-estate with such a huge sum of investments than many countries’ GDP.
This is because of the unique prospects of investing in Dubai and the country’s attractiveness in gathering foreign resources and investments.
However, for the property sector, the major reason is the high return on investment (RoI) that is something every investor is concerned about. Rental earning becomes a critical element of returns as it develops immediately in contrast to capital appreciation which can be obtained only upon selling the real-estate.
The average rental RoI acquired on apartments in Dubai in 2017 was 7%, whereas villas accounted for 5%, in spite of an average softening of sales and rent costs, according to the research study carried out by - a Dubai-based online real-estate listing website, grounded on 94,000 listings on Bayut.com between November 2016 and November 2017.
Dubai Expo 2020
The UAE state has exempted property division from the VAT list. Merely commercial areas excluding hospitals are to be added to the VAT list. The prices of the real-estates are decreased, which makes it an ideal time to invest in Dubai real estate market.
During the next few months, a substantial rise in demand is expected due to Dubai Expo 2020. Speaking of which, the property owners and constructors are not letting the reduction in demand influence the supply growth.
The reduction in the oil prices created its effect on the property market demand which is also dependent on the foreign currency rates. The rise in employment prospects will certainly assist the property market to flourish the demand, which apparently raises the market prices. As per the experts, Dubai Expo 2020 will augment the oil prices and the property demand which will create massive employment prospects.
In any case, the reduction of rental prices supports the Dubai residents economically, as home rents will be acquiring 40 percent of the monthly income, the reduction in the rental costs will increase their savings and make it more affordable.
A Leading Global Property Sector
Dubai currently enjoys the leading position in the global real estate industry with regard to investment destinations among other major metropolitans around the world. Dubai’s average return on investment ranges between 7-8 percent per year, contrasted to the top performing cities of the world.
Also, the stable regulatory context reinforces investment safety to foreign and overseas investors. During the past 10 years, the government has strengthened the regulatory and legal structure to assure the best practice at every level of the real-estate development, marketing, assessment, brokerage and transaction activities to assure timely ownership of properties.
Another important reason for such massive investments in Dubai’s real estate market is the city’s strong and liberal connectivity with foreign exchange practices that facilitate freedom of capital flow and revenue without any limitation. The ever developing infrastructure remains to benefit the property sector greatly. The UAE government has sustained a persistent and stable supply of new tourist attractions within the country which advances the asset value even more.
One of the highly progressive economies supported by massive expansions in its infrastructure, regulatory and legal reforms and topnotch attractions has converted Dubai into a leading real-estate investment spot. Not only does the city of gold remain the regional leader, it also leads an international recognition which is hard for others to compete with since Dubai continues its benchmarking.
2017 was certainly a challenging time for the Dubai property market however, 2018 is going far better with the increase in demands towards the end that will be continued in 2019 as well. Therefore, industry experts recommend that this is an ideal time to invest in Dubai property market to experience a huge value in near future.