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Why is Dubai Luxury Real Estate So Attractive for Property Investors Globally?

  • 22nd Apr 2021
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Why is Dubai Luxury Real Estate So Attractive for Property Investors Globally?

Dubai is a coveted location

One of the prime reasons for global investors to invest in Dubai luxury real estate is that Dubai is undoubtedly the glamour hub of the world, it is a global address, a sparklingly strategic location that every affluent person or company wants to have a piece of.

Ease of investment

Another critically important reason is that investing in Dubai luxury real estate is definitely easy and along with the tax advantages that Dubai offers compared to many other luxury real estate markets, it makes a lot of sense for wealthy investors to do so.
Taxations in many other mature real estate markets across the world is extremely high and for most wealthy investors Dubai luxury real estate purchase is better than investing in other locations.

Demand for luxury properties in Dubai


The amazing fact about Dubai is that irrespective of the market conditions within Dubai, UAE or in general across the globe - there is always a very healthy demand for luxury homes in Dubai. Even at this current time where the effect of the Covid 19 pandemic is creating havoc across the world, there are some luxury real estate markets in the world that are selling very strongly and Dubai is surely one of them.

As per leading luxury real estate agents in Dubai the overall sentiment for buying and selling luxury properties in Dubai is very strong and that is also proved by the actual transactions that are taking place in Dubai luxury properties on the ground.

 

Better return on investments (Booming ROI)

One of the fundamental objectives of any real estate investment is to make good returns on the property investments (ROI). This is exactly where Dubai property investments outscore many other locations across the globe. The returns on luxury property investments in Dubai are extremely lucrative both in terms of capital as well as in terms of rental yields. It is therefore no surprise that the last decade and a half have seen investments pouring into Dubai luxury real estate from all quarters as the discerning property investors have found a great place to increase their wealth - Dubai luxury real estate.

 

Dubai Annual Transaction Report – 2020

 

One glance at the numbers that the annual transaction report – 2020 issued by the Dubai Land Department (DLD) states would be enough to understand the prowess that Dubai property investment holds.
Total number of real estate transactions in Dubai real estate in 2020 - 51,414
Total value of real estate transactions in Dubai 2020 - AED175 billion.

Investments by foreign nationals

 

Total number of foreign investors in Dubai real estate market - 19,757
Total number of real estate investments by foreign investors in Dubai in 2020 - 24,666
Total value of foreign investor transactions in Dubai 2020 -  AED 35.6 billion.
Biggest investors in Dubai real estate segment - Indians | Chinese | British | Pakistanis | French.

Investments by GCC countries

Total investors from Gulf Cooperation Council (GCC) countries investing in Dubai real estate in 2020 -  6,704
Total number of real estate investments by GCC investors in Dubai in 2020 - 8,659
Total value of GCC investor transactions in Dubai 2020 -  AED 14.8 billion.
Biggest GCC investors in Dubai real estate segment
Emiratis | Saudis | Kuwaitis | Omanis | Bahrainis.

Investments by Arab investors

Total number of Arab investors investing in Dubai real estate in 2020 - 4,388
Total number of real estate transactions in Dubai 2020 by Arab investors - 5,283 Total value of real estate transactions in Dubai 2020 by Arab investors -  AED 7.5 billion.

Additional Factors for Investment in Dubai Luxury Real Estate:


Tax rates in other parts of the world are significantly higher and this is one of the biggest reasons for global buyers to view the Dubai property market favorably.
Location
Dubai is also popular due to its location as it is almost located equidistant between Asia and Europe.


Higher Annual Rental Yields: Studies conducted by real-estate investment consulting firm, Global Property Guide also reveals that an average yearly return on Dubai properties is 5.19%. This is significantly higher compared to annual rental yields in New York (2.9%) London (2.7%), Singapore (2.5%), and Hong Kong (2.4%).
With a rise in the real estate value post-Covid era, Dubai’s property market has much higher possibilities of even better returns.


Lower Property prices per square meter: The property prices per sq. meter in Dubai are far lower compared to other international cities. According to the Global Property Guide, the cost per sq. meter for a 120 sq. meter apartment in Dubai is US $5,918 compared to Hong Kong (US $28,570), London (US$ 26,262) New York ($17,191) Tel Aviv ($17,149) Geneva ($16,467) Tokyo ($ 16,322), Paris ($15,867) & Berlin ($7,325). Even the cost of buying a house is much cheaper in Dubai compared to other international cities.


As per reports and researches by leading property firms - the average price of a home in Dubai is AED 1 million (USD 272,000), compared to USD 1.2 million in Hong Kong, USD1 Million in Munich, USD 915,000 in Singapore, USD 650,555 in Paris, and USD 649,026 in New York and this is a very strong reason for home buyers to look towards Dubai.

Zero Property Tax: Properties in Dubai have a 0% tax on property purchase and filing income returns. The burden of the property tax rate in other countries is higher such as UK (2.53%) France (1.70 %), Greece (1.50 %) Iceland (1.48 %), and Italy (0.71 %) according to the International Tax Competitiveness Index (ITCI). Zero Property tax is another factor that makes Dubai a preferred choice for international investors.
Safety: UAE is one of the safest regions in the world which makes Dubai a top choice to invest in. According to Gallup Law and Order Index 2020, the United Arab Emirates is the 4th safest country in the world compared to Germany (ranked 26th) France (ranked 31st) Japan (ranked 33rd) US (ranked 36th), and the UK (ranked 49th).  In terms of Law and Order, UAE has been ranked 10th globally in 2019 Gallup’s global Law and Order Index.


Residency Visa: To make its real-estate sector attractive for global investors, the UAE government has rolled out new visa laws linked to property investment offering a quick path to residency (terms and conditions apply).



WRITTEN BY

Founder and CEO of Realspace Assets LLP, a seasoned industry hand with hands on work experience of more than 15 years’ in real estate. He has also managed to put in place a highly organised core team consisting of deal makers, real estate marketing professionals, computer programmers, web desi... read more


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