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Data from Arab real estate analysts for the 1st half of 2021 show that Dubai housing prices are stabilizing and recovering in popular areas. During this period, the average cost of 1 m2 increased by 5%. And luxury houses and apartments in areas like Palm Jumeirah, Dubai Hills Estate and Emirates Hills by 5-10%.
With these rising prices, more developers have convenient payment options and reduced registration fees. Some don’t even need registration fees from international buyers. This has increased the interest in luxury real estate in Dubai.
In this article, we’ll give you helpful investment information on Dubai’s profitable areas, projects and how to make sure your real estate investments are secure.
Contents:
- Why do expats choose Dubai for investment and residence?
- How to choose a profitable investment area in Dubai
- How are real estate investments in Dubai made as safe as possible?
- Conclusion
Why do expats choose Dubai for investment and residence?
There are many investment opportunities in Dubai and buying real estate is one popular way that Russian and CIS citizens do this. There’s a lot of interest in Arab real estate because there’s no income tax in Dubai. This makes renting and buying property here highly profitable, unlike anywhere else in the world! In Singapore and Hong Kong, residential real estate investment profits are 2.82% and 3.2 in London. But Dubai’s profits are 7.1% and can go up to 10%. Also, if you buy an apartment worth more than AED 750,000 (about USD 204,000), you get the extra benefit of getting a residence visa.
2021’s results show Dubai’s real estate market growth:
- Annual rental income from 4.6 to 10% ROI (profitability indicator).
- Real estate is more affordable and luxury apartments and houses are in high demand.
- Investors can spread their assets across properties in different areas or price ranges.
- Dubai is a prime spot for fast-growing trade, technology and many other business opportunities.
- According to the Dubai Master Plan, by 2040, the emirate should become the best place in the world to live. These ambitious goals attract tourists, grow the economy and infrastructure, and strengthen the society in the emirate.
- Real estate is highly liquid with very low inflation.
- The country's government has taken a number of measures to strengthen and protect investment capital.
- Investors can get bank loans at favorable rates.
Recent UAE citizenship law changes now accept freelancer visas and 10-year visas for developers. Also, foreigners can now fully own a company in Dubai. This has increased the number of buyers and investors in the emirate.
According to the Dubai Land Department (DLD), 62% of property buyers in Jan- March 2021 were new investors. And in June 2021, 6,388 purchases and sales of AED 14,790,000,000 (USD 4,300,000,000) were registered in the Airborne Forces. This shows Dubai's strong position as the best city for residential investments.
How to choose a profitable investment area in Dubai?
It’s best to check up-to-date data in official reports before you choose and buy real estate in Dubai.
Dubai Marina
Dubai Marina was built by the developer Emaar Properties and covers an area of 4.9 km2 along the Persian Gulf coast. It has more than 200 buildings, including the Princess Tower, the second-tallest tower in the world. It also has the 88-story 23 Marina Tower and 84-story Ocean Heights Tower.
Many properties here are either apartments, villas or houses. Investors can choose from studios and apartments with 1-5 bedrooms, hotel rooms, penthouses with 2-6 bedrooms, villas with 3-5 rooms and duplexes with 2-4.
Dubai Marina is in the south-east and popular for tourists and as a residential area. Throughout 2021, it attracted great interest from investors and luxury real estate tenants because of its high-quality construction, magnificent coastal views and closeness to tourist sites. It also has the best return on investment of Dubai’s apartments - 5.5% per year. But this can go up to 7-8% depending on the area, developer and amenities.
Real estate on offer in Dubai Marina are:
- Ciel Tower is an 82-story multifunctional building under construction. Commissioning is planned for the 2nd quarter of 2023. It will have 1,042 luxury hotel rooms with world-class amenities. Prices start from AED 2,099,000 (USD 571,500).
- Address Beach Resort + SPA is a luxury apartment complex in JBR (Dubai Marina), commissioned in 2020 and now ready to move into. The project has enjoyed great success with investors before so today only limited 1-bedroom apartments are available for AED 2,125,000 (USD 580,000). Owners will conveniently have a real estate maintenance and management program.
Emaar Beachfront
This area sits on the waterfront in Dubai Harbor’s north. It’s on the bay between Palm Jumeirah Island and the Mina Seyahi Hotel on mainland Dubai. The project has 27 residential buildings on a strip of reclaimed land with sandy beaches alongside it.
Construction started in 2017-2018 when Dubai Island was converted into a 1.5 km long strip in preparation of the Emaar Beachfront master plan. Emaar was the first established developer in 2018. Emaar Beachfront is convenient – you can get to Dubai Marina, Jumeirah Beach Residence and Palm Jumeirah in no time.
Emaar Beachfront is great for investors looking for a property with a high return on investment. The ROI here will be at least 8% a year.
All residential projects at Emaar Beachfront will have 2 buildings. Each will have apartments with 1 to 4 bedrooms as well as penthouses. An investor could even buy out an entire floor of 1023 m2. The apartments are great for couples or a single person. ou can expect costs from AED 1,350,000 (USD 368,000).
2 complexes were completed in Emaar Beachfront - Sunrise Bay and MarinaVista. They were done in late 2021. 2 more ambitious projects will be completed in the 2nd quarter of 2023 - Beach Isle and Grand Bleu Tower. The Lebanese designer Elie Saab, is collaborating on these. Construction for Palace Beach Residences also started and will be ready in late 2025. Buyers and are spoilt for choice. You can pick an affordable premium-class property with an easy payment plan. And you can do this directly through the developer.
Discovery Gardens
The 6 km long Discovery Gardens residential area is in Jebel Ali, between Sheikh Zayed and Emirates Roads. You’ll find more than 26,000 budget studios and apartments with 1 or 2 bedrooms. It’s one of the best places for work and entertainment because it’s a step away from business centers like Dubai Internet and Media City.
This area is one of the most popular among ambitious and young professionals. More than its ongoing residential and commercial development, Discovery Gardens has 3 medical centers, cafes and restaurants, and many parks. It offers everything for the whole family, including 13 public swimming pools, tennis, basketball and volleyball courts, gyms, a football field, running and cycling paths, mosques and spacious parking lots. Ibn Battuta Mall, the largest themed shopping mall in the world, is just next door.
The best area in Dubai to buy an affordable studio or apartment is certainly Discovery Gardens. You can find studios from AED 280 000 (USD 76,250) or1-2 bedroom apartment from AED 690,000 (USD 188,000). It also has the highest real estate ROI of up to 9-10% per year.
There are 6 main buildings in Discovery Gardens - Zen, Mediterranean, Modern, Mogul, Mesoamerican and Cacti. The Mediterranean Cluster is a great choice if you want to buy an apartment in Dubai. Property here brings in good profits and is in demand by investors and tenants. The price for rent starts from AED 19,000 (USD 5,200) per year. The next most popular are Asian-inspired Mogul and Zen buildings.
How are real estate investments in Dubai made as safe as possible?
The Dubai Department of Land Resources (RERA, Real Estate Regulatory Authority) is a government agency that regulates everything to do with real estate. RERA has criteria that construction companies must follow to get a construction permit and sell apartments in the UAE.
The developer has to:
- Own the land where the apartment building will be.
- Guarantee that they have the construction funds. And they must keep this in an escrow account for 1 year after the property is complete. The amount should be 10% of the project’s total cost. The developer can use this if any problems come up during construction.
- Complete 20% of the construction before selling apartments or houses.
- Contribute a guarantee to RERA. This was 20% until 2020. There’s now a measure to protect buyers. The contribution is 50% of the entire project’s cost put in an escrow account, like all other depositors’ funds. A guarantee shows that the developer has enough funds and can complete the project on time.
Conclusion
To invest reliably in a house or apartment in Dubai, stick to these main points:
- Choose an area after checking what official profitability reports say;
- Choose a verified developer with a good reputation;
- Pay in installments to protect your money and interests.
Any investment can be risky so it’s always helpful and wise to contact lawyers and real estate specialists when you buy real estate. With our help, your investment experience will be worry-free and successful!
