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Real estate investments

Dubai is considered as one of the fastest growing real estate markets in the world due to its favorable weather conditions, tax benefits, great community stadards and government friendly policies towards foreigners in their investments and towards setting uo their primary business in the country. Furthermore, constant government involvement in promotion of Dubai as a safe and investment friendly emirate within the United Arab Emirates gives its appeal amongst foreign buyers in general.

With our partners of Flagship Rentals we are able to provide our clients with proper education about the market, offer impartial advice, and deliver unparalleled access to the newest and best developments. With our partners within the real estate investments business, we truly can provide a ‘one-stop-shop,’ with the breadth and depth of services covering everything from buying, selling, and renting, to property management, property maintenance, vacation rentals, and mortgage consultancy.

Give us a call for your free consultation about the most promising real-estate market on the planet.

Why Dubai? – Its appeal

A big reason is the fact it’s so safe. Dubai is often rated as one of the safest cities in the
world in terms of social and economic stability.
In fact, last year the UAE was rated the second safest country in the world, according to a safety index of 134 countries compiled by Global Finance magazine. The index considers three fundamental factors – war, personal security, and risk of natural disasters. Last year, it also included risk factors stemming from the Covid-19 pandemic. As a potential investor, safety is obviously an important word. The UAE offers a safe environment for its residents – both nationals and expats – but also the millions of tourists that visit every year.

As an investor this should assure you that Dubai will continue to grow its population and tourism, offering potential capital growth, strong rental yields – especially with holiday rentals as tourism gets better each year – and stability.

The vision:

Under the visionary leadership of HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice-President and Prime Minister of UAE and Ruler of Dubai, the emirate has developed at an extraordinary pace.

There is a real can-do attitude in the city – a feeling that anything is possible!

From being able to deliver fuel to fill your car via an application on your smartphone to sending astronauts into space, the UAE is always thinking of new ways to enhance its residents’ lives and is the first to embrace cutting-edge new technology

 

0% Tax and 5% VAT

One of the key benefits for people choosing to emigrate to the UAE over and beyond the sun, sea, and sand lifestyle on offer.

Whilst tax was introduced in 2018, it will not affect an investor’s rental income. The VAT is also substantially lower than other major countries across the world: Sweden 25%, Germany 19%, Italy 22%, Netherlands 21%, UK 20%, USA 15%*

 

 

The UAE economy:

The economy of the UAE is the second largest in the Middle East (after Saudi Arabia), with a gross domestic product (GDP) of USD 410 billion (AED 1.5 trillion) in 2021.

The UAE has been successfully diversifying its economy – particularly in Dubai – from one heavily reliant on revenues from petroleum and natural gas to one centred around trade and tourism.

Real estate and financial services:

From early beginnings with the pearl trade in the 19th and 20th centuries, to the gold trade of the 1950’s which led to the city becoming known as the ‘City of Gold’ – Dubai has learned early to innovate and adapt to challenging times. While Abu Dhabi and other UAE emirates have remained relatively conservative in their approach, Dubai – which has far smaller oil reserves – was bolder in its diversification policy to attract international businesses to set up Middle East, and even world headquarters,
in the city.

Tourism is one of the bigger non-oil sources of revenue in the UAE, with some of the world’s most luxurious hotels being based in the country. A massive construction boom, an expanding manufacturing base, and a thriving services sector, are helping the UAE diversify its economy.

Nationwide, there is currently an estimated US $350 billion worth of active construction projects. Real estate in Dubai has been led by the largest government owned developers creating vast master-planned residential and commercial communities.

Major players include Emaar, Dubai Properties, Nakheel, and Meraas – all competing to
ensure that the bar for quality and innovation is constantly being raised. From man-made islands to the world’s tallest tower and the only 7-star hotel, Dubai has used real estate development to promote itself as a global tourism and business hub. Dubai is also home to Dubai International Financial Centre (DIFC), a top ten global financial centre and the leading financial hub in the Middle East, Africa and South Asia (MEASA) region.

Free zones have been created to include a huge range of service industries – all encouraging both new and existing businesses to operate in secure, innovative, and tax-free environments. Three of the prominent free zones include Dubai Internet City, Dubai Media City, and Knowledge Village. Located next to each other and in the heart of ‘new Dubai,’ these centres offer their respective business communities the best opportunities for success.

Jebel Ali Port is a gateway hub that enables trade across the region and beyond. It is a vital link in the global trade network, connecting eastern and western markets with North Africa, the Middle East, and South Asia. As DP World’s flagship, it is the largest seaport in the Middle East and ranks among the top ten container ports of the world.

 

Real Estate outlook:

As we move past one of the most unprecedented economic setbacks in generations with the pandemic, the outlook for Dubai’s economy and real estate market is very positive. Property prices mid 2020 were reset to levels similar to what we experienced after the financial crisis of 2008/2009 and it seemed like those of us who were too fearful to enter the property market last time have been given a second chance.

This time things are even better – Dubai’s property market is well regulated, the population has been growing steadily every year (doubling in the last ten years), and investment in industries continues to grow. So, what can we expect over the next ten years?

A growing population of long-term residents is absorbing the shrinking supply of new properties and investors continue to put their money in businesses in the region. You can expect to see the typically high Dubai rental yields of up to 7-8% start to soften as property prices begin to pick up.

Realistically, we’ll see yields closer to 5% in the prime communities as the emirate’s property market continues to mature. However, this is still significantly better than other major cities such as London (2.7%) and New York (2.9%).

This is all good news for property buyers because as Dubai’s marketplace matures, investors can expect prices to increase significantly as we climb out of the bottom
of the current economic cycle – we would expect prices to as much as double within
the next decade. One other point to think about is that Dubai property prices are currently at the same level as they were around eight years ago. Which other markets in the world can you think of where that is
the case? Add to this the fact that the Dubai government has a target of reaching six million residents by 2040 – essentially doubling the current population – and we can see there are major capital growth opportunities.

And as we are unlikely to see property prices come back down to current levels in any future period, the time to buy really is now.

 

Why buy real estate in Dubai?

This could be the easiest question to answer. Dubai is not even in the top 30 most expensive cities in the world in terms of the price-per-metre to buy a property, with the top three being Shanghai, Vancouver, and Shenzhen.

But interestingly for an investor, Dubai is 18th in the ‘highest monthly rental of cities around the world’ list – and 42nd in the ‘expensive cities to live’ list.

To give you an idea of rental returns, you are buying into arguably one of the best cities in the world with 5-7% net return a very realistic average. In comparison: Paris 2.8%, London 2.7% New York 2.9%, Hong Kong 2.3%, and Singapore 3.3%.

Add to that, you don’t pay any taxes on your rental income and when it comes to selling you don’t pay any capital gains tax – both of which can seriously affect your returns. Dubai will continue to be attractive to tenants because of the packages companies can offer them here, the lifestyle they can enjoy, the weather, its safety record, and its convenient location.

The population has grown year-on-year and will continue to grow. Combine this with the announcements by Dubai Land Department to regulate the number of new property developments; permits will allow slack to be taken up and in turn demand will pick up.

Relaxed visa requirements and a wide range of government incentives for both business and tourism will further extend population growth. With each global crisis that comes Dubai’s way, the city shows the rest of the world how it is ready to bounce back, bigger, and better than before.

We’ve seen how Dubai has grown in the last twenty years; it will be exciting to see what happens over the next twenty.