Investing in real estate has long been considered one of the most reliable and lucrative ways to build wealth. Real estate offers a range of advantages that make it an attractive investment option for those seeking long-term financial stability. Unlike stocks or other financial assets, real estate provides a tangible asset that can appreciate over time, generate passive income through rent or other sources. If you are planning to invest in real estate, then we cannot emphasize enough on the benefits of buying property in Dubai.
Dubai’s property market has emerged as a top destination for real estate investment, attracting investors from all over the world. The city’s booming economy, strategic location, and investor-friendly policies have made it a hub for global business and commerce, leading to a surge in demand for residential and commercial properties.
In this blog, we will give you some solid reasons why Dubai is the best place for investment.
Exploring Benefits of Buying Property in Dubai
We really don’t need to convince you about the benefits of buying property in Dubai as the data speaks for itself. As the chart below shows, since January 2023 only, properties worth 116.92 billion AED have been purchased. The data is a clear indication of the attractiveness of Dubai as a real estate investment hub.
So, what is the hype all about? Why are investors so convinced about the benefits of buying property in Dubai? Let’s explore some more reasons.
-
High Rental Yields
The first and foremost reasons is the rate of return. Did you know the rental yields in Dubai are about 5% greater than other parts of the world and in some places, like Dubai marina, Downtown Dubai, and Jumeirah Village Circle (JVC), it can go up to 7-8 percent annually. On the contrary, the rental yield in New York is around 3.6%, while in London it is 4.1%.
The high rental yields in Dubai can be attributed to stable economy, tourism, and recreational opportunities it offers, which results in an influx of people in the city from all over the world, throughout the year.
2. High Capital Gains
There are two ways you can gain from investing in property: Rent and capital appreciation. Dubai is also a lucrative market when it comes to capital gains. The Dubai property market is booming right now. Property prices have increased by 20% since 2020 and according to Morgan Stanley, this rally will continue in 2023 as well because most of the transactions are cash based and hence they are not affected by interested rates. This growth can be attributed to structural reforms and high rental yields. As per the CBRE group, the average rent has increased by 26.3% in the city.
-
Stable Economy
With the ongoing fears of recession, many investors are concerned about losing their wealth. However, Dubai’s economy remains strong despite global recession. The UAE economy is expected to grow by 3.9% in 2023. Over the last two years, Dubai received multiple foreign investments and became a global hub for business and commerce. The growth is a motivation for investors from all over the world to set up their business in Dubai.
-
Low Property Acquisition Costs Compared to Global Cities
The Dubai property market has been rising for the past two years. However, even after this increase, the property prices in Dubai are cheaper as compared to other global cities.
Prime property prices in Dubai are cheaper as much as 20 to 80 per cent when compared to major cities such as Monaco, Hong Kong, New York, London, Geneva, Paris, Beijing, Tokyo etc. According to research, in Dubai you can get 105 sq meters for $1 million where as you can get only 17 sqm, 21, sqm, 33 sqm and 43 sqm in Monaco, Hong Kong and Paris, respectively.
Moreover, unlike other countries in the world, where dealing with real estate is a hassle and delayed process, the UAE government has relaxed restrictions on property ownership and investment. Investors can easily buy and sell property from anywhere in the world.
-
Tax-free income
One of the best benefits of buying property in Dubai is no property tax. Once you have paid the registration fee to the Dubai Land department, there are no additional charges. Isn’t it great that you enjoy your real estate gains in dubai without paying any property tax?
If you go to any other place in the world, you have to pay a lot of taxes. For example, 23% tax is applicable to the legal entity while selling a property in Turkey. Similarly, in the UK, the residential property tax rate in the UK is around 28%.
-
High Standard of Living and Safety
Dubai is known for its luxurious lifestyle and high-class living with its glamorous buildings, beach facing villas, skyscrapers, and grand mansions. In addition to this, its vibrant culture, night life, stunning architecture, and the city’s rich history make it a desirable destination for many people.
Dubai also offers world-class amenities, such as top-notch schools, hospitals, and infrastructure. It has some of the best shopping malls, fine dining restaurants, and entertainment options.
One of the best benefits of buying property in Dubai is that it is a safe and beautiful country to live and build a family. It is one of the most secure countries in the MENA region with no major violence incidents or political instability. You can work, dress up, or drive anywhere in the city at any time and feel safe. The police is prompt and helpful and in case of any accidents on the road, etc.
-
Golden Visa on Investment
This initiative by the UAE government is aimed at attracting foreign investors, entrepreneurs, and talented professionals to the country. It provides long-term stability and security, which is essential for those who want to establish themselves in Dubai and contribute to the country’s economy. To be eligible for a Golden Visa in Dubai, you must make one of the following investments:
- Property Investment: Purchasing a property in Dubai worth AED 1 million or more.
- Business Investment: Starting a new business in Dubai with a minimum capital investment of AED 500,000 or having an existing business with a minimum investment of AED 1 million.
- Public Investments: Investing AED 10 million or more in public investments, such as depositing funds in a UAE-based company or investing in a venture capital fund.
- Entrepreneurship: Entrepreneurs with an innovative business idea that has been approved by an accredited UAE incubator or a government body.
Future of Dubai Real Estate Market
The Dubai real estate market has recorded high achievement in the last 2 years, a great news for for all the investors who decided to jump into the market 2 years ago. Now, it is your time!
As far as the future of the Dubai market is concerned, it holds many great opportunities for those who are still thinking about investing in the Dubai real estate market. While there are looming fears of the global recession, the Dubai market is expected to remain strong. With rapid infrastructure development, a thriving tourism businesses and now the golden Visa opportunity, the Dubai market is expected to remain strong in the upcoming years.
Are you ready to invest in Dubai?
We hope the benefits outlined in this blog intrigue and encourage you to invest in the Dubai real estate industry. This country is growing despite global headwinds. It is a perfect melting pot with various cultures and nationalities peacefully coexisting. It is no doubt the safest and the smartest city in these times. So, what are you waiting for? Interested in buying a property in Dubai? Contact us today!