Dubai has transformed into a real estate hotbed of the world in a relatively short space of time, with homebuyers, investors, and expats chasing high returns and high-quality lifestyles. A Dubai real estate developer plays an important role in the booming industry as visionary plans continue to re-shape city skylines. Tax-free returns on investment, desirable locations, and a steady stream of foreign investors make Dubai’s property market one of the most dynamic in the world.
Dubai real estate registered over AED 300 billion ($81.7 billion) of transactions within the past twelve months,with most of it being off-plan and ready ones. The rising demand is fueled by supportive government policies, long-term residencies, and a booming economy. So, how do you decipher this booming market? Whether you’re an investor or a future homebuyer, it is necessary to understand key trends and opportunities.
Why Investors Are Flocking to Dubai’s Property Market
Dubai real estate market is thriving, not just for its high returns, but also for its unmatched stability and resilience. While other markets in the globe are oscillating, Dubai is a safe bet for investors, thanks to its strong regulatory environment, economic diversification, and progressive government policies. The city’s status as a global business hub also translates to properties always in demand, driven by international business professionals and entrepreneurs seeking a long-term hub. Moreover, with future mega-projects in the pipeline, such as smart cities and infrastructure expansion, investors are pre-emptively locking up properties today to enjoy the benefits of tomorrow’s growth, leading to sustainable long-term accumulation of wealth.
Dubai is a desirable destination for property investors worldwide. Several factors are the reasons for its long-term growth:
- Make your Money’s Worth- Compared to London and New York, Dubai offers greater rental returns at a rate of 6-8% annually. The absence of property tax, capital gains tax, or inheritance tax makes Dubai very appealing to investors.
- Government Support & Residency Permits: Investor-friendly policies, such as the golden visa and the residence permit for 10 years, have boosted market confidence.
- Diverse Property Options: Ranging from luxury penthouses to sea-fronted villas to affordable housing, Dubai offers a property for every budget.
Buying Property in Dubai- Everything You Need to Know
The process of buying property in Dubai is easy, but must be carefully planned. Dubai also offers freehold and leasehold property, with foreign ownership allowed in freehold locations. Some of the key factors to consider for the buyer are-
- Freehold and Leasehold- Full ownership is granted by freehold properties, which is the reason they are greatly preferred by investors and expatriates. Leasehold properties, on the other hand, provide long-term leases of 99 years but do not provide full ownership.
- Understanding Transaction Costs- While Dubai does not have an annual property tax, the buyer must also account for transfer fees (4% of the property), agent commissions, and service charges, which vary with the community and the type of the property.
- Mortgage versus Cash Purchase- While cash payments are the standard, financing is also available to UAE nationals and non-residents. The rates of interest typically range between 3-5% per annum, with the LTV ratio being as much as 80% for UAE nationals and 75% for expats.
The Rise of Off-Plan Property Investments
For those with high capital return needs and variable payment terms, off-plan property is a rapidly emerging option. Off-plan property, which is purchased before the construction is finished, has a number of advantages:
- Lowered Entry Costs & Improved ROI
Off-plan apartments tend to cost 10-20% cheaper than finished apartments. Properties in desirable locations also experience an increase of 20-30% on completion, yielding substantial capital gains.
- Flexible Payment Schemes
Most developers offer installment payment schemes that facilitate the purchase to be paid in installments. Some developments have post-handover payment schemes to alleviate the payment burden as the property appreciates.
- Newer Designs & Personalization
Off-plan purchasers generally have the opportunity to select unit layouts, finishes, and other specifications, ensuring a customized investment.
Is the Time Right to Invest Now? Future Perspective
Dubai’s property sector is likely to remain resilient with new government policies to aid long-term residency programs and sustainable city development. With the legacy of the Expo 2020, tourism, and ongoing infrastructure developments, the city remains an international focus. For those contemplating real estate investment, having a reliable Dubai real estate developer as a partner and being aware of the most important trends in the market is vital. Whether you buy property in Dubai to use yourself or consider off-plan property as a future investment, the options are endless. With the right research and planning, Dubai is one of the best places to invest in real estate globally. Hiring a consultant to help you out and doing some research on your own is always advised before you invest. Happy investing!
