Dubai is attractive for investors from around the world. The largest emirate of the UAE provides substantial investment prospects for homeowners. The metropolis has a high demand for all sorts of real estate: villas for sale in Dubai the UAE are bought just as frequently as apartments. Investors don’t just pick ready-made residences. Off-plan projects in Dubai are equally popular. Let us see why real estate in the emirate is in demand and what the potential benefits are for its owner.
Dubai is world famous for its multi-nationality, tolerance, and open and friendly attitude towards all cultures, nations, and religions. Like the UAE as a whole, about 90% of the population of the emirate is made up of foreigners. In 2021, the Emirates took second place in the ranking of the Global Finance magazine among the safest countries on the planet (a total of 134 states were involved in the study). And Dubai received the UN award as the most sustainable city in the world that same year.
In terms of real estate investment, Dubai has the following advantages, due to which it is chosen by investors from all over the world:
- Stable income in foreign currency, up to 7-8%, through renting (at the same time, you can hire a property management services while residing outside Emirates);
- Possible remote purchases and further rental of real estate without coming to the UAE;
- Low-interest mortgage loans (between 5% and 7% for non-residents);
- Obtaining a UAE resident visa for real estate investment (starting with AED 750,000 or USD 204,000), which brings a lot of opportunities, from zero taxes to direct access to local exchanges;
- The purchase of real estate for cryptocurrency;
- No income tax for residents (including income from property rental).
Absence of restrictions on foreigners purchasing properties
Prior to 2006, foreigners were only permitted to rent property in the UAE for up to 99 years; they were not allowed to purchase it and take full ownership. Thanks to a special law, foreigners now have the right to buy real estate in specifically designated freehold zones, rent it out, or resell it. There are more than 60 of these zones in the city. Additionally, their list keeps expanding. This allows you to select the best option for any budget, whether it be in the suburbs, in well-known resort communities, or in the city’s central areas.
Reasonable prices for apartments for sale in Dubai
For people who are not interested in the cost of housing, purchasing real estate abroad, particularly in Dubai, may appear to require paying unreasonable sums of money. However, this is not entirely true. Apartments and villas are common residential properties that can be divided into three different price categories: economy, comfort, and premium. The city is regarded as one of the world’s most accessible markets for luxury real estate, according to experts.
In the emirate, you may find housing stock for any budget and level, from a small studio apartment to a lavish villa. Apartments cost $300,000 on average. Villas for sale in Dubai are offered for $500,000. Prices are especially appealing when compared to comparable offers in other mega-cities. How many square meters of property will be bought for a million dollars?
- Monaco, New York, Hong Kong, London, Los Angeles, Singapore, Geneva, and Paris – up to 50 sq. m.
- Sydney, Tokyo, Shanghai, Miami, Berlin, and Melbourne – between 50 sq. m. and 100 sq. m.
- Dubai – more than 100 sq. m.
That is, a square meter of premium quality in Dubai is three to five times cheaper than in other metropolitan areas.
Level of return on real estate investment in the UAE
In 2021, the United Arab Emirates entered the TOP-10 in the IMD World Competitiveness Ranking, which is published every year by International Institute for Management Development in Switzerland. At the same time, in terms of quality of life, the development of trade, as well as the effectiveness of government initiatives, the Emirates were ranked third in the world.
One of the important advantages of the UAE economy is its strong national currency. The dirham exchange rate is tied to the dollar. It has remained stable for more than 20 years, including the start of the pandemic and other crises. At that time, for example, the ruble “dropped” significantly. In 1997, it was set at a ratio of 1 USD=AED 3.67 . It is still at the same level. For comparison: the dirham has grown almost five times in relation to the ruble over the past 15 years.
Meanwhile, the price of property in the UAE has been continuously rising throughout 2021. Experts anticipate that this trend will continue in 2022. Therefore, in the future, the acquired unit can be sold for a higher price. Furthermore, you can earn a significant passive income from renting out in the UAE, with rates as high as 7%-8%.
Both tourists and expats who relocate here to live and work are interested in renting homes in the UAE. Dubai was named the world’s top travel destination in TripAdvisor’s compilation of Travellers’ Choice Awards for 2022. This means that the demand for short-term rental housing will grow.
High ROI property for sale in Dubai
The housing stock in the emirate has an average ROI of 7%. In certain areas, it gets up to 10%. Hence , you can rent the property out for a profit. The owners make a net profit because there are no personal income taxes in the United Arab Emirates. For more information about the districts of the emirate with the most investment-friendly projects, please visit the Emirates.Estate website.
Visa through the purchase of real estate in Dubai
The owner may apply for a three-year residence visa after purchasing a housing unit worth more than $204,000. A ten-year visa is available when purchasing a residence for more than $545,000. This applies not only to finished properties, but also to properties for sale off-plan in Dubai. A resident visa holder gets the following opportunities:
- A long-time stay in the UAE;
- The opportunity to freely enter and leave the country;
- It is not required to permanently reside in the country;
- The opportunity to open a bank account and take out a loan;
- The opportunity to receive a UAE tax resident status;
- Run your business in the Emirates;
- Work for local companies;
- Enlist children in local schools;
- Study at the university;
- Take out medical insurance and use health care services;
- Get a driver’s license;
- Apply for a Schengen visa and a US visa.
Winning prospects for owners of property in Dubai
The emirate develops rapidly. The population grows as well, hand-in-hand, confirming Dubai’s ranking as one of the fastest growing cities worldwide. In the previous 40 years, the city’s population has grown tenfold. In 2017, 3 million people lived here. Even then, expats from 190 countries around the world were among them. Beginning in 2022, there will be more people living there than 3.5 million. The city will be home to roughly 6 million people by 2040, according to forecasts. Additionally, there is a significant demand for apartments for sale in Dubai due to the development of new neighborhoods, great rental potential, and infrastructure improvements.