Overseas real estate has always attracted foreign investors. Dubai is one of the rapidly growing destinations in the global real estate market. Real estate in Dubai is considered by foreign buyers as a place to move to a permanent place of residence and also as a good option for a family vacation or investment. Let’s understand what Dubai actually offers property buyers.
- Metropolitan real estate as a place to live
- Aspects of investing in real estate in Dubai
- Dubai price policy
- Myths and misconceptions about Dubai property
Metropolitan real estate as a place to live
Over the past year, the issue of relocation has become more relevant than ever. Tired of change, and political and economic instability, people are striving to find a territory that’s safe in all respects with a high standard of living. Dubai can be classified as such a place for several reasons, including:
- A booming economy that doesn’t, as is commonly believed, depend solely on oil production.
- Well-developed education and healthcare.
- Lack of difficulties with adaptation, as the metropolis is, in fact, a city of visitors and not just local sheikhs and oligarchs.
The city is open to ex-pats. Even though it’s almost impossible to obtain local citizenship, this does not prevent foreigners from enjoying all the benefits of the local infrastructure. Purchasing a residential property here allows you to apply for a resident visa, the duration of which depends directly on the amount of investment in the emirate's housing stock:
- If you buy a property worth over $205,000, you can apply for a three-year visa.
- Acquisition of real estate costing over $545,000 will allow you to apply for a ten-year “golden visa”.
In the future, while maintaining the ownership of a house or apartment in Dubai, a resident visa can be extended an unlimited number of times.
Aspects of investing in real estate in Dubai
The worldwide political and economic instability leads to the fact that an increasing number of investors are thinking about how to save their existing funds, and, if possible, to increase them. Real estate remains the most profitable asset as, in Dubai, owning real estate allows you to receive a recurring income. The profitability ratio of the housing stock in the emirate is 6% or more. In popular areas, it can reach 10%.
At the same time, apartments in residential complexes in Dubai remain consistently in demand. The population of the country is growing rapidly, so the housing stock is not only actively bought, but also actively rented. About 3.5 million people currently live in the city, and, according to forecasts, the local population will increase to 6 million people by 2040. Therefore, the high demand for housing will continue. The speed of real estate sales also confirms the fact that good real estate units are sought after. Most of the off-plan apartments in skyscrapers are sold at the stage of excavation, as finished apartments cost several tens of percent more.
Dubai price policy
The prices for apartments and villas in Dubai are another reason to purchase residential real estate. If we compare them with the cost of similar properties in Europe and the USA, we can clearly see the profitability of buying real estate in the Emirates. E.g., In Dubai, you can buy a modern and comfortable apartment with an area of over 50 square metres for $500,000. It would be impossible to find a similar property at this price in London or New York. And this is just one of the possible options. The main advantage of the UAE real estate market is the variety of offers - you can find both a compact studio apartment costing $200,000 to $300,000, as well as a luxurious penthouse or villa costing several tens of millions of dollars.
Myths and misconceptions about Dubai property
Buying overseas real estate always raises legitimate concerns about the security of the transaction, its expediency, and its profitability. Stereotypes often interfere with the decision, and below we name a few of them:
- Money should be invested only in primary housing. In the real world, transactions with the secondary housing stock in the UAE account for 60% of the total. At the same time, secondary apartments are not necessarily those in which someone lived. Primary residences are considered to be those sold directly by the developer at any stage of the construction. If the apartment was bought by an investor during the construction process and is sold at the time of commissioning of the residential complex, this is already secondary housing. The profitability ratio of the housing stock has nothing to do with the fact of whether it is primary housing or secondary housing. Prices and rental fees depend on the level of luxury of the residential community and the comfortability of the apartment. E.g., the legendary skyscraper Burj Khalifa was commissioned in 2004, but the apartments in it, even now, cost no less than $1,000,000.
- It’s better to buy an apartment than a house. Indeed, investing in purchasing a villa will be more significant, but this does not necessarily make the investment unwise. As of 2021, the demand for villas and townhouses is growing rapidly. This is a profitable asset in demand in the sales and rental market.
- It’s difficult for foreigners to buy housing in Dubai. Another myth, the roots of which go back to the days when renting was only available for non-residents in the UAE. Today, in the metropolis, there are several dozen free zones in which residents of other countries can own and dispose of real estate based on full ownership.
- Transactions with foreign real estate are risky. It’s impossible to exclude the occurrence of force majeure when buying a property in any country. But in the UAE, the buying process is completely transparent and controlled by the Land Department. Even investments in an under-construction (off-plan) residential real estate are quite safe, as the construction is carefully controlled by supervisory authorities, and the developer is legally obliged to own assets that cover the debts to buyers in case of unforeseen circumstances.
Even though Abu Dhabi is the capital of the UAE, Dubai is developing more rapidly today, opening up wider investment prospects due to its global popularity.
So far, the real estate prices in the emirate remain affordable but are actively growing. Therefore, it would be wise not to delay the decision to buy a residential property in Dubai.
Using the services of a qualified real estate agent means learning the features of acquiring real estate from the inside and minimising any risks.