5 signs which make Dubai real estate a good investment
According to a report by MEED, UAE’s real GDP growth is expected to be 4 to 5 per cent between 2017 and 2020.The report also revealed that contracts worth around $22.6 billion were awarded during the first half of 2016, mainly driven by real estate, power and transport projects in Dubai. The exponential rates of development coupled with a maturing property market that offers strong returns makes Dubai a global hotspot for real estate investments today. Let’s take a closer look at five compelling reasons to invest in Dubai’s real estate:
#1 Growing economy
Investing in an overseas property by extension means you’re investing in the country’s economy. With Dubai’s economy growing steadily and poised to record a 3.7% growth in 2016 up from 3.6% last year, according to the International Monetary Fund, it shows no signs of slowing down. Consequently, the market value of Dubai’s real estate finds a boost from positive socio-economic variables like continuous population flow, widening job markets, rapid infrastructural development, increasing tourism and retail sector growth – significantly increasing the desirability and profitability of real estate.
#2 Developing neighbourhoods
Dubai is home to a prosperous economy and a steady flow of expatriates and visitors. Responding to the demand of housing the inbound population, you will find a variety of developments being built across the city. On the one hand you have colourful, golf community villas like AKOYA Manarola from AED 999,999 appropriate for investors looking for a place to call home. On the other hotel apartments such as those at DAMAC Maison Privé are ideal for professionals and business people alike.
Each of these property types come as lucrative investment options thanks to growing demand. Further, BMI Research predicts the value of UAE’s construction industry to rise to Dh181 billion next year, up from 2016’s Dh162 billion. They also predict a 6 per cent growth in the run up to the Expo 2020. With the rise of such properties and infrastructural plans, Dubai neighbourhoods are expanding at an exponential rate, setting up multiple lucrative investment opportunities.
#3 Low acquisition cost
The perks of a developing economy extend to the cost of its properties. Despite rapid growth and exceptional infrastructure recognizably at par with global standards, Dubai’s real estate industry is still in its budding stages when compared to international destinations like London, New York and Hong Kong.
#4 High appreciation potential and returns
Thanks to lower acquisition costs in a growing economy, the value of Dubai’s real estate market can only go up from here. With the city’s development still on the rise, there’s no better time than now to invest in property that will show high appreciation in the years to come.
If you aren’t planning to sell your property in the long run, then you need to look at rental options. With Dubai’s real estate returns averaging at 7-9 per cent, easily 2-3 per cent higher than its matured international counterparts like London, New York or Paris, the city becomes all the more attractive to investors. In prime areas, even a 10 per cent return isn’t uncommon.
#5 No property tax
Picture a property valued at $500,000. In London, you can expect to shell out another $11,650 in property taxes, and in Hong Kong, be ready to part with $75,100. But buy the same property in Dubai, and you get to walk out with $0 in property taxes and a big smile on your face. That’s right –your decision to buy property in Dubai just got a whole lot easier!