Your Guide to Investing in Dubai Real Estate
Author: Sadiq Suleman
We do agree with the fact that investing in real estate is one of the best investment options that are suitable for various reasons because it provides the best possible returns on making long-term investments. The value of a property could vary.
However, it can increase in the long term. We can also consolidate it with rental earnings. This could also be a pivotal component of our return on investment and can offset overall mortgage Rates and costs.
When pacing your personal funds in savings accounts, real estate investments could be a highly beneficial and significant investment. It is a sector that does have a much more stable investment when compared with the stock market.
Before you plan to invest in real estate options, you should be able to identify the potential target market, analyze and understand relevant individual preferences, needs and also the kind of property that would be most suited for a specific group. Investors can plan accordingly. If they do belong to a specific income group, they can provide relevant property and additional benefits.
There is also an option to set out terms for rental properties accordingly and also take up help from reputed property management and Investment Real Estate company in Dubai. In this guide, we will provide you with various reasons that will help you to explore why you should invest in Dubai’s real estate market.
Dubai as a beneficial investment option
Due to flexible payment plans and attractive real estate prices within Dubai, more people are now looking to invest and buy in Dubai’s real estate. When thinking to buy real estate property in Dubai, investors can find a buyer or seller market. Currently, a detailed portfolio of properties is now available within the Dubai market. This has now led to affordable prices for the purpose of keeping the market in favour of buyers.
For potential investors, Dubai provides a fairly straightforward and hassle-free process for the purpose of purchasing a property. There is no lengthy paperwork or special permits if you want to invest in Dubai real estate. Rather, it is a smooth process for investing in property in the UAE when compared with other parts of the world. As a result, you can easily invest in Dubai real estate.
Some of the most attractive property prices illustrate that Dubai properties have experienced a massive increase in the total number of people investing in it, specifically due to Expo 2020. As a result, real estate could well prove to be a good investment within the UAE.
Another important reason to invest in Dubai real estate is the fact that neighbourhoods residential are much more established. Buyers also have an idea of what they can expect from the property. This has now led the confidence of the investor and they can certainly invest in Dubai real estate in the future.
Real estate investors that are looking for purchasing apartments in Dubai could well expect a potential return on investment that could be in the range of 5.5% to 8%. For the first quarter of 2020, the market report illustrated that profitability for Dubai Marina apartments is 6.4%.
However, the central Dubai apartments provide rental yields of nearly 5.4%. For the purpose of property investment, Dubai can provide excellent rental yields in a market that provides an average return on investment of over 8% and sometimes as high as 10%.
How do foreign investors benefit from UAE’s real estate market?
For foreign investors, U.A.E. is regarded as one of the best countries in the world in 2020. Even though UAE has introduced V.A.T., it is not applicable for an investor’s rental income. As a result, the tax-free income has been one of the main reasons why foreign investors prefer to invest in Dubai.
Moreover, Dubai invests consistently in its infrastructure. It also remains one of the best cities for visitors as it provides a high investment potential. Due to EXPO 2020, there are now various other influential motives for potential investment in the Dubai real estate sector in 2020.
Potential investors can now witness a massive increase in the total number of transactions that could well follow the decline of investment in the real estate sector in the last five years.
Several property experts are of the view that forecasts for real estate in UAE are highly positive. There are various possible reasons for the purpose of real estate investing. It is evident that UAE real estate has made a massive influence on the world map.
Moreover, it has also been compared consistently with various global centres including London, New York, and Hong Kong. Due to Expo 2020 projects, including Dubai Metro Extension and Al Maktoum International Airport taking form, In the real estate market of Dubai is highly likely to be a beneficial option for real estate investors in the near future.
Recovery in Dubai real estate sector after COVID-19
Even after the occurrence of COVID-19, we can safely state that Dubai is one of the best and safest places to purchase property in the Middle East. The recovery in Dubai’s property market allows investors to capitalize on low prices.
At DAMAC, construction for projects has continued. The organization has seen massive interest in its developments post-lockdown, specifically due to overseas investors because some interesting real estate investment opportunities are currently available.
It is essential to note that the UAE does have one of the highest rates of population growth rate across all the Arab countries. This is also related to the country’s excellent services. It includes healthcare, a luxurious lifestyle and an ever-growing population of expatriates.
The rental market has also been massively boosted due to the delayed Expo 2020 in 2021. The increase in demand for rental properties has also been extremely high before as well as during the event’s six-month duration.
Moreover, Expo 2020 would maintain nearly 80% of the strictures and Expo’s buildings for providing a lasting and meaningful legacy. Purchasing real estate investment where there is an excellent rental market does bring better short-term rewards while return on investment continues.
Is it a good time now to invest in real estate in Dubai?
From an investor point of view, it is apparently a beneficial time to invest in the Dubai property market. This is because property prices are fairly valued. Moreover, they are now much more affordable when compared with nearly all of those in the top 25 major cities globally. In fact, property prices in Dubai have now been close to undervalued among the world's top 25 cities.
Is Dubai a good place for real estate investment?
Indeed. Dubai is also a beneficial place for a real estate investment. The city also provides higher rental yields when compared with many other mature real estate property markets. On average, investors have the option to attain gross rental yields of between 5-8%.
Moreover, Property prices per square foot are also comparatively lower when compared with several other cities at a global level. This makes Dubai an affordable location to purchase prime real estate.
How to make money in real estate in Dubai?
Foreigners and expatriates can indeed invest In Dubai. To invest in Dubai real estate Methods, foreign ownership is allowed in areas that have been specifically designated as freehold. Foreigners (who don't live in the UAE) and expatriate residents have the option to acquire freehold ownership rights over property without leasehold rights, restriction or usufruct rights for nearly 99 years
What is the future of real estate in Dubai?
The future to invest in Dubai real estate certainly looks good. The commercial real estate markets and residential real estate markets for investment have now undergone massive change in the preceding decade. When we consider the overall returns of real estate investments, we should focus on two very important components.
The first is the rental income generated by the real estate investment at the date of purchase. It also focuses on whether it will continue to generate over the investment period. It is primarily driven by the lease, due to fixed or market rental increases or reviews through the term. The second most essential component is capital growth. This could only be generated after exiting the investment and is not fixed.
Is it better to buy or rent in Dubai?
There are various factors to review before you decide to rent or Buy a Property in Dubai. The most essential factor that would help you in making the decision on the ‘rent v/s buy property in the UAE’ would primarily depend on how long you plan to stay within the country.
If you are one of those individuals that have come to consider UAE your home than you should do your personal analysis, your due diligence, review market conditions and become a home-owner in the lucrative UAE real estate market.
However, if you don’t have any idea where you could be in the next year and want the flexibility for moving to another country in the near future, then you should just rent a Residential property in Dubai or any other city in the UAE.