Blog Article On The Dubai Real Estate Market
Lavinne Munala
Invest in Real Estate In Dubai: A Guide On Buying Property
Conversations about the real estate market in Dubai are becoming more common between investors, home owners, real estate brokers and so on. They are all looking into the Dubai market amused at how fast its booming. More so how foreigners are suddenly flooding the market and investing in real estate. But there is always an unavoidable question in those conversations: Will the Dubai real estate market continue booming or are we getting closer to the breaking point?
The answer is simple. No, the market is not getting closer to its breaking point but rather getting better and hotter. The tax free regulations, luxurious lifestyle with good networking opportunities, iconic skyline with good infrastructure, beachfront living, upcoming casinos, all year sunshine and favorable climate among others are just a tip of the ice berg on why you should consider investing in Dubai.
According to statistics, in 2024, Dubai attracted 110,000 new investors in real estate with a total of 222,600 transactions worth AED 761 billion. A 17 percent rise from 2023. If that shouldn't be convincing enough for you, don't worry, there are more reasons mentioned throughout the article.
Reasons Why You Should Invest In The Dubai Real Estate Market
1. High Rental Yields.
Dubai offers a high return of investment, especially in the prime areas, ranging from 5% - 10%. The ROI mostly depends on the type of property and its location.
2. Stable Market Growth.
After Covid, Dubai's Real Estate Market has seen a stable growth since 2021. Most properties have increased more than 50% from its initial value. It is predicted that the market will continue to have a stable growth due to the government's plans on attracting more people and businesses into the country.
3. Zero Tax Benefits.
Can you imagine just how much you are able to save by not having to pay tax? This has attracted high investors into the Dubai Market. There are zero tax regulations in the following areas:
Annual Property Tax, Rental income for landlords, Capital gains while selling your property, Inheritance transfer tax and Income Tax from salaries / wages.
4. Developed Infrastructure.
With easily available transport systems to high speed internet, investors are able to attract tenants to occupy their properties and even buyers.
5. Diverse Market Needs.
Dubai offers a diverse market from luxurious properties,apartments and family homes. Billionaires, business owners, families and young adults are all moving to Dubai and looking for a place to stay.
6. Wide Financial Solutions.
Dubai offers flexible payment plans for the off-plan properties and mortgage opportunities for residents and non residents [Foreigners].
7. All Year Tourism.
If your main focus is on short term rentals, with the all year sunshine and endless tourist attractions, you can be assured of having an all year income. Especially if you focus in the prime areas like Dubai Marina, Palm Jumeirah and Downtown.
8. Golden Visa Opportunities.
When you invest more than AED 2 Million in Dubai real estate, you get a 10 year golden visa.
To keep this visa, one is not allowed to sell the property for at least 3 years. This rule is implemented to avoid people that want to flip properties just for the golden visa.
Challenges You Might Face While Investing In Dubai Real Estate
It will be unfair to give you all the right reasons to invest in the real estate market without sharing the challenges involved. The benefits are definitely higher but here are a few cons and reasons why you should be cautious.
1. Rental income may vary.
This mostly affects the short term rental apartments.The reason being, during the hot summer season, most people leave Dubai to escape the heat and tourists avoid coming in. It might force you to reduce the price of the rent to adjust with the market. However, this should not be a worry as during the peak season, you can double the rent and still get your annual profits. Just be careful, as it may feel like a gamble.
2. Expensive transaction costs.
Dubai Charges a 4% Fee during property registration, usually paid by the buyer.There is also a 2% Fee payable to the real estate broker. Some of the minor charges are NOC Fees and administrative fees to issue the title deed.
3. Service charge and Property maintenance fees.
While other properties have lower maintenance fees, you might come across those with high or rather unimaginable overpriced fees. Especially in luxurious properties or properties with pools. Before investing, always inquire about the service fees or you might find yourself spending half of the rental income earned on service.
Real Estate Investment Options: Offplan vs Ready to Move
There are two main investment options when it comes to real estate in Dubai: Off plan and Ready Properties. They basically refer to the status of the property.
OFF PLAN PROPERTIES
An off plan property is one that is still under construction, or in other circumstances one that is about to be constructed. Buyers receive the plans, layouts and designs of how the project will turn out.
Pros:
1. Lower prices compared to the ready to move properties. 2. Affordable down payment. 3. Flexible payment plans often with no interest. 4. High potential of capital appreciation by the time the property is completed.
Cons:
1. Property completion date may be delayed for weeks or even months. 2. Risk of the construction being canceled.Always go for a reputable developer to avoid
this kind of situation. 3. Change in price. In rare circumstances, the price might go down depending on how
many units the developer was able to sell.
A ready property is one that is available for immediate occupancy.
Pros:
1. Buyers can visit, inspect and familiarize with the property before purchasing it. 2. Generates immediate profits as you do not have to wait for the construction to be
completed. 3. The price is according to the current market place.
Cons:
1. Price tends to be higher than the off plan properties. 2. There might be less room for renovation. 3. Higher down payment.
Strategies On How To Invest In Dubai Real Estate
A right investment is achieved with the corrected strategies. A wise man once told me that you make profit while buying, not while selling. If you do less research and end up buying a property overpriced, be assured that you have already made a loss. With so many properties in Dubai for investment, here is a checklist on things to consider.
1. Location. To maximize your profits, purchase real estate in prime areas like: Downtown (ROI 5-6%), Dubai Marina (ROI 7%), Jumeirah Village Circle (ROI 7-8%) Palm Jumeirah, Business Bay, Dubai Hills and Arabian Ranches.
2. Purpose. It is important to consider the purpose of the property you are buying as this may affect certain aspects. Is the property for short term rentals? Is it just a quick investment to resell? Is it for long term rental to families?
3. Service charge. Always ask for the yearly service charge cost of the property to align if it goes with your financial plans.
4. Real estate agent or broker. To avoid being scammed or misinformed by money focused agents, always go for reputable and well known companies to guide you on finding the best investment. Some of the top 5 real estate companies in Dubai include: Damac Properties, Sobha Realty, Haus & Haus Group, Metropolitan Premium Properties and FAM Properties.
Apps To Consider While Buying Real Estate In Dubai
Sometimes, rather than only focusing on what your real estate agent is telling you, it is advised to also do your own research. This will help you avoid paying an overprice or even making the wrong investment. Remember, you make the profit when buying the property, not while selling. Selling just enables you to cash in the profit. Here are some of the free applications that I recommend for your research.
1. Property Finder, Dubizzle, Bayut: To look for the properties available in the market and compare prices.
2. DXBinteract: Shows all of Dubai's real estate transactions history with the actual sale prices. It is linked with the government data, DLD.
3. Dubai Rest: Shows rental index, ownership history, service charges and even developers history.
4. Property finder also offers a mortgage calculator. You can even request loan pre approval directly through the application.
Conclusion.
The Dubai real estate market is one that you should not miss getting into given the chance. The government is supportive to foreigners making it easy to find the right investments.
The security in this place is also very impressive with strict laws. Unlike some of the countries that you can easily get scammed, UAE puts effective measures to ensure this never happens. Find the right real estate agent and go around the market, you might find your slice of paradise in this luxurious destination.
FAQ: Frequently Asked Questions
1. What is the future of real estate in Dubai? Dubai is predicted to continue booming with a 7% annual growth, with off plan sales becoming more common.
2. Can foreigners invest in Dubai? Yes, the Dubai Government makes it easier for foreigners to invest here. Whether while inside or outside UAE.
3. What is a good ROI in Real Estate? A good return on investment in Real Estate ranges between 5-10%.
4. Is the real estate market in Dubai going to drop?
Not precisely, with the introduction of casinos and more projects, the demand for real estate is expected to go up.
5. Which are the prime locations with high ROI in Dubai? The best areas to buy properties in Dubai are: Downtown, Palm Jumeirah, JVC, Dubai Marina, Business Bay, Dubai Hills and Arabian Ranches.
6. How much is real estate in Dubai? The price varies from property to property but the average price per sq ft is AED 1200 -AED 5000 for the branded luxurious properties.
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Posted Apr 10, 2025
The article covers the real estate market in Dubai, its benefits for investors, verified statistics on transactions, tools that investors should use and more.
