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Dubai Real Estate Market - Why Investors Are Returning?

Dubai real estate investment is one of the most lucrative ones in the whole world that brings manifold benefits. Everyone can invest here with the thought of achieving everything prominently.

Dubai Real Estate Market - Why Investors Are Returning?

Did you just read the title? 

Have you observed the same? 

Is Dubai's real estate market again attracting investors?
 
Yes, it is reviving - it has shown tremendous growth over the past year.  

 
The apparent changes the pandemic brought to the market shook the base of Dubai. It witnessed the whole downtrend but now again it is reacquiring the grip. 
 
If you and I are observing the growth, we are sailing in the same boat. Investors are hitting back to the Dubai property market witnessing the bespoke changes. But what are the reasons exactly? Is there any specific reason why investors are coming again or it’s just a bubble created? Let’s know that below with some of the facts and figures mentioned. 

What Have Been The Results Of The Dubai Real Estate Market In 2021?

Knight Frank's 2021 report, speaks about the increased value of Dubai’s housing by 44%. Good growth has been observed in the residential market with Dubai having the highest sales among the top 100 popular countries. Looking at this growth experts have come to the viewpoint that with this situation 2022 will also grow well and investors will keep on choosing this country for investment. let’s find out some of the reasons for investment in Dubai.

  • Among the top-notch European countries, Dubai is having the most competitive prices in real estate.
  • Dubai offers you the highest standard of living with everything prominent presence of the leading brands.
  • The attractive tax system allows you to save lots of money and also allows you to generate income with savings.
  • Annual capitalization is also one of the advantages one can avail with investment in Dubai with the growing housing demand.

Forecasting The Dubai Real Estate Prices - What Will Be The Results?

Needless to say, the how global pandemic created havoc in the market but still there was a scope for investment in Dubai and an option for investors to find permanent residence. Among a whole lot of investments, one-bedroom and studio apartments witnessed the maximum growth. 2021 has seen townhouses, villas, and apartments as the leaders with the adding and increasing importance.
 
“According to Liam Bailey, CEO of Knight Frank, interest in the UAE housing market will continue to grow in 2022.”
 

Is It The Right Time To Invest In Dubai?

“There is no doubt that Dubai’s real estate sector has bounced back and from the market trend, we can be reasonably sure that the sector is on a sustainable growth path at least for the next three years. This is the best time to invest in Dubai property considering the fact that the value will steadily appreciate by 2023-24,” said Shilpa DK, CEO of Arqonz.com.”
 
It is always the right time for real estate investment, only there are some things that one needs to be cautious about. Even when the market was sluggish, then also market was suitable depending on where and why you needed to invest. Looking at the prolific growth in the past year, 2022 will surely see a rise with Dubai staying associated with the luxuries and prosperity.
 
This is not just attracting the people from UAE but from the whole world like Russia, UK, US, India, and many more. The market is appearing very attractive to investors. Also, the attractive return on over-investment in real estate is enticing providing an annual profitability index of up to 10%. Also, off-plan real estate will be in high demand as long-term investments are the best and most profitable.

Dubai Will Lead To The Next Economic Boom

“Attracting FDI to the tune of $ 4.3 billion at a time when the world is still recovering from the pandemic-induced slowdown is something very reassuring,” opines Rakesh Menon, former global senior vice president, JP Morgan Bank based out of London.”
 
According to the industry and the financial experts, in terms of FDI attraction, Dubai ranks first in the Arab world and third globally which means it is heading and already facing an economic boom. Dubai's political leadership is one of the main reasons behind the economic growth.
 
Interestingly, Dubai's FDI Capital flow has been recorded as $ 4.3 billion from 371 projects in the first 9 months of 2021, tremendous growth has been observed. It is a good recovery post-pandemic and something reassuring the market to come up phenomenally.
 
 “Dubai is now among the world’s most attractive FDI locations. Global investors have placed their confidence in our business ecosystem, says H.H.Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Executive Council of Dubai.”

Dubai Real Estate Market 2022 Is Lucrative For Investors

Looking at the history of the Dubai real estate market it has seen cycles. From a very attractive market, it has seen the lowest phase as well. Like 2005 witnessed the peak and then 2008 witnessed the total crash. It again took a rise and recovered by overcoming all the flaws with 2014 again coming as the highest time to face the crash again in 2018. It was a slow-down again, then a pandemic came and the market shook once again but this time it started recovering soon in 2021. This time it came with a bang with the most attractive options from the builder’s side, government initiatives attracting investors, and the countries taking interest in Dubai real estate.
 
Looking at so many initiatives that are coming from every side, I don’t think that any downward trend will be seen as the market is more mature now and people know how, when, and where to invest. Investors are now very smart to build a portfolio and earn well even when the market is low.

Do You Know The Type Of Investors The Dubai Market Is Witnessing Right Now? Here Are Some.

Smart Money-Spinners

Well these are the smartest beings that made most of the money during whenever real estate boom and invested it in a way that the result came out double and triple with the next investment. The market has always given them opportunities and no doubt they have tried to pick all the advantages with better results. Investors are more attracted to the pre-launch projects and then selling them out when fully planned to result in better growth.

 "New market segments such as retirement homes and old-age care homes are also expected to grow in relevance in the near future, says the financier, as government reforms make Dubai a more attractive residence for the long term."
 
End Users Are Increasing

They are the main part of the real estate market the world is the end-users, basically the foundation stone. The population is growing and the increasing count is showing more interest in the market. Also, the other markets of the world as well are showing interest and end-users are on the top that is willing to become part of space and want some stability in it.

In a comparison of global cities, Dubai real estate is rated too low and this is the reason why investors are putting all of their money here. This is one of the most efficient ways of earning rental income and enjoying property appreciation over time.
 
Investors Who Want A Jump

Some so many investors completely lost out in Dubai when the market was low and still looking for some hope. With the new laws and tax relaxation, the market is again becoming attractive. They are earning well by putting the homes on rent for the vacation people who are looking for a beneficial staying option in Dubai. It is time for continuous growth now.

If you are an investor who is looking for something that can give a regular income increase on the investments then short-term properties are good because of lesser maintenance but if looking for long-term investments then the residential projects like townhouses and villas are best that will also give you mesmerizing results. These are attractive investments that will provide you and your family security with an abundance of funds and returns.

Dubai Property Market - Attracting Investors From Across The Globe - Reasons

Needless to say that Dubai real estate market is attracting people from all over the Globe. Not just the country UAE but many countries are showing interest in Dubai real estate. But what exactly are the reasons for the Dubai property market attracting investors? Let’s know some below.
 
Fetch Higher Annual Rental Yields

Well, the top-notch real estate consulting firm revealed that Dubai properties give an average yearly return of 5.19% and this is quite higher in comparison to other countries which are not even crossing 3%. Dubai Housing is marketing new and better possibilities with better returns.

“CBRE, the real estate consultant, said that price and rent increases have been seen in 2021 and 2022 as well, the price and rent improvement is expected according to a report by S&P Global Ratings.”
 
 Per Square Meter Price Is Lower

Other international cities are offering prices per square meter higher than Dubai thus attracting more investors to make a beneficial investment. In comparison of other countries like Hong Kong (US $28,570), London (US$ 26,262) New York ($17,191) Tel Aviv ($17,149) Geneva ($16,467) Tokyo ($ 16,322), Paris ($15,867) & Berlin ($7,325), Dubai is having price US $5,918 that makes the cost of property buying lesser than any other.

Dubai Is A Safe Country

Dubai is known for its strict laws and coming up as the safest region around the Globe. It is a top choice for investors and especially women, who feel safe living, working, and enjoying living here. UAE is the 2nd safest country in the world whereas other competitive countries are in no comparison to it according to the Global Finance Magazine.

“Alliance Business Advisors, a leading consulting firm has presented a report that the average price of a home in Dubai costs AED 1 million (US$ 272,000), which is again lesser in comparison to US$ 1.2 million in Hong Kong, US$ 1 Million in Munich, US $ 915,000 in Singapore, $ 650,555 in Paris, and $ 649,026 in New York.”

Free From Tax

Well, Dubai is the country with zero property tax. Whether you are purchasing property and filing the income tax returns you have 0% tax on properties. Zero property tax is another beautiful reason why Dubai is a favored choice for international investors. Whereas in other countries people have to pay a good amount of tax like the UK (2.53%) France (1.70 %), Greece (1.50 %) Iceland (1.48 %), and Italy (0.71 %), as per International Tax Competitiveness Index (ITCI). 

Easy Obtaining Residency Visa

Real Estate in Dubai is gaining attraction also because of the residency visa for the global investors. The UAE government has brought out the new visa laws directly linked to the property investments providing quick options for residency and then investment. In fact, the Golden Visa has boosted the spirit of investment here.

Outstanding Visa Reforms

Dubai's real estate market is booming and in 2019 with the introduction of long-term and renewable Golden Visa for several categories of people. It is a brilliant step taken in order to attract investors’ attention that was for a longer time were showing no interest. Now with this visa and the reduced amount of AED 2 million investors can plan their investments and stay here for a longer duration.

Increasing Property Value

When it comes to price appreciation Dubai real estate market is amazing. Especially the villa segment is attaining a positive growth coming on the list of top priorities of national and international investors. Also, the property rents are increasing bringing exquisite properties to light. You can enjoy profits with high rents from the property. The increasing value and the rate appreciation are the main reasons behind the people's interest in Dubai real estate sector.

Upgraded Level Of Living

Dubai has shown a tremendous level of growth in the standard of living. Looking at the features that Dubai is showing it is becoming an attraction for real estate investment. The popularity of high-end living, eye-catching amenities, robust infrastructure, top-class connectivity, rejuvenation segments, and more are providing prominence to this location and a reason for the investors to come and invest in the property segment of Dubai.

Expatriate-Friendly Policies

Expats are looking back and again to Dubai because of the attractive policies the Government is coming out with. Like the Golden Visa, well after this visa even if you are a foreign investor then also you don’t need a local sponsor for yourself. Now the relaxed policies have made the investment pretty easy. Also, several changes have been made in the areas prone to crimes with more procedure laws making it an expat-friendly city. You don’t need to stay more concerned now.

“Cyril Lincoln, vice president and global development director of real estate finance and advisory, investment, and agency services at Mashreq Bank, also points out that another factor supporting the demand for housing in the country is its appeal to digital nomads. This concept refers to those who lead a mobile lifestyle and work using digital technologies.”

Returns Appreciation Is Eye-Candy

The most appreciating part for real estate investors is the expectation and attainment of higher returns. The property market of Dubai is presenting higher returns this year in comparison to last year. There are some of the areas in Dubai that are turning the heads like Business Bay, Jumeirah Lake, and Jumeirah Lake Towers offering high returns.

Dubai stands true for this- Real Estate is an imperative part of any country’s economy. The whole nation revolves around this sector only because of the endless growth and eye-catching returns. This is the sector that attracts new investments daily and plays a significant role in economic development. Having a transparent real estate sector is important for any country’s growth and this is the best part that Dubai's political leadership understands making the country one of the most lucrative hubs in the whole world. This land has become the favorite spot of investors who are looking for the highest ROI.
 
If you are not aware, let me tell you Dubai market has made a stunning comeback and it has removed all of its suffering reaching the peak of investment. So, if you are planning to invest in Dubai then it is time.

Dubai Is Even Attracting The FDIs- Foreign Direct Investments

According to data released by the Dubai Investment Development Agency (Dubai FDI), an agency of Dubai's Department of Economy and Tourism (DET), Dubai continued to lead the way when it came to foreign direct investment (FDI). In the first nine months of 2021 alone, UAE attracted AED15.9 billion (US$4.3 billion) of FDI capital from 378 projects, an increase from the same period in 2020, and phenomenal growth is expected in 2022, and so on.
 
A ranking by the Financial Times' FDI Markets, which captures and compares foreign direct investment data across the world, places Dubai third globally in terms of attracting greenfield foreign direct investment capital and projects, and FDI into reinvestment projects. People from all over the Globe are coming and investing here.
 
In the emirate, FDI reinvestment projects constituted 11% of the total. According to the State Department, the number of new jobs created through foreign direct investment grew by 36% during the first nine months of 2021 as compared to the same period last year when 12,090 jobs were created.

FDI projects totaled 378 during the first nine months of 2021, an increase of 16% over 326 during the same period for 2020. The inbound foreign direct investment consists of 58% strategic sectors and 52% greenfield projects. 64% of inbound FDI capital is spent on high and medium technology, up 2% over the same period in the previous year.
 
FDI sources in Dubai during the first nine months of 2021, according to the Dubai FDI Monitor, were led by the United Kingdom with 29.7%, France with 19.7%, the United States with 14.6%, Saudi Arabia at 6%, and India at 4%. Dubai received capital from these five countries together for 72% of the total. According to the data, the United Kingdom was ranked first among the countries with FDI-related projects with 20%, followed by the United States with 19%, India with 11%, France with 6%, and Germany with 5%.
 
What Is Dubai's Real Estate Market Future? Is It Bright Or Brighter?

Over the years, Dubai has come up as an eye-catching destination with mellowing opportunities. Whether it is a job or investment, sustainable living, enticing people, impressive architecture, or robust infrastructure, everything exceptional is offered in Dubai providing you a chance to develop a high-end living for yourself. This is the perfect place for you to be self-assured in the promising market of UAE. With the rebounding real estate market, this is your chance to live and grow.

FAQs:

1. How did Dubai attract investors?

A major attraction for foreign investors is the stability of the Dubai economy, low energy costs, and the tax-free environment for companies in Dubai. Dubai is also an attractive investment destination due to its lack of restrictions on the repatriation of profits.
 
2. Is Dubai a good real estate market?

Due to international demand, the residential and ultra-luxury markets have continued to grow in Dubai in 2022, with several records broken and high competition. 
 
3. What does Dubai’s current market look like coming out of Q1?

Just recently, one of the best quarters in history took place. With over USD 15.3 billion in sales and over 20,000 transactions, the first quarter of 2022 was the highest so far. The apartment took over the majority of sales. 
 
4. What is the return on investment in real estate in Dubai?

Return on investment in Dubai is recorded as the highest in the world with 8-15% and a gross rental income of 5.19%. If you are investing in Dubai you will surely earn manifold benefits.

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