The business capital of UAE i.e. Dubai is swiftly progressing to become a worldwide symbol of unlimited power and potential of human mind. It is governed under a leadership which has successfully linked humanitarian interests with science, growth and development.
Dubai with population of 2.7 million people and home to 200 nationalities is truly one of the most diverse places to live and work in. The strategic placement of Dubai on the world map makes it a city that connects East and West as it is just within 8 hour flight from 2/3rd of world’s population.
Dubai is also amongst world’s most attractive real-estate investment destination. According to Dubai Land Department (DLD) annual report 2016, total number of real-estate transactions in Dubai were 60,595 holding value of more than Dh259 billion. In terms of foreign investment, 22,834 people across 136 nationalities have invested in Dubai real-estate market with a total value of Dh44 billion.
According to regional survey by Cluttons in 2017, Dubai has surpassed London in terms of most preferred property investment location. The top countries investing in this sector include India, Britain and Pakistan. Recently, China has also become an active participant in this sector of Dubai thus reinforcing its position as a mature and safe haven for international investment.
In this article, we have summarized the factors which have contributed towards development of real-estate sector in Dubai and why you should invest in it.
Reasons to Invest in Real Estate Sector of Dubai
When you are looking to invest on an overseas real estate property, you must know that not only you are investing in a piece of land but also contributing towards that country’s economy too. Economic growth is one the key factors before investing in this sector.
Dubai’s economy is flourishing and is amongst the fastest growing economies of the world. It came out as a champion in MENA region due to the reason that govt. reduced its dependency on oil (oil contributes just 5% of Dubai GDP) and shifted its focus towards other sectors such as trade, real-estate and tourism.
- High Return On Investment
The best advantage of this sector is return on investment. Rental returns in Dubai are very high compared to major real estate capitals around the globe. On an average, the returns are 7-8% with best performing areas generating up to 10% rental yield and minimum return will not be less than 5%.
Another reason to invest in real estate market of Dubai is that it is tax free. If you buy a commercial or residential property, it will not include tax. Additionally, once you become the owner of property in Dubai, no annual tax will be levied on you.
The acquisition cost of land is much low in Dubai compared to other parts of the world. The average price per square foot in Dubai is USD 468 as compared to that in London which is USD 3,208.
- Growth in tourism industry
Tourism plays significant role in Dubai’s economy. Dubai is amongst the top travel destination of the world and is widely known as “world’s shopping hub”. Construction of new hotels, resorts and real estate development projects are the reason which resulted in Dubai’s growing tourism sector.
Dubai will host the World Expo starting from October 2020. Approximately 25 million people from 200 countries are expected to visit this glorious event. As a result of this, off-plan property sector has boosted. People who invest in property near expo site will get a high ROI (return on investment). Also, as the event will last for 6 months, millions of people coming to attend it will need to rent property due to which rental demand will be high. Landlords will exercise its benefits by increasing rents.
Another advantage of buying property in Dubai is the sense of security. Dubai has the lowest crime rate. You do not have to worry if you leave your wallet visible in your car. It is not likely to be stolen as these concepts are unheard of in Dubai. That is why people prefer to live here as they feel safe.
Another benefit that you can enjoy after purchasing property in Dubai is the eligibility to get resident visa. There are however some requirements which you need to match such as minimum property value and no mortgage. In order to obtain visa, you will have to visit Dubai Land Department.
The population of Dubai is growing steadily. According to Dubai Statistics Center, Dubai population in 2016 was 2.4 million and it is forecasted to reach 5.2 million by 2030 as a result of which property projects in Dubai will increase with each passing year.
- Demand & Supply For Real-Estate Investment
According to Dubai properties Office, 80% of the demand of real estate will come from international investment but today, not even 50% comes from it which means that there are plenty of opportunities for foreign investors to capture this huge market.
Dubai is rapidly progressing towards becoming a global commercial hub and with its increasing population, creation of more job opportunities, and opportunities for foreign investment, demand will always be there and is increasing steadily.
If you are looking for investment opportunities in Dubai or need to start your project in real- estate sector, contact our representatives at KWSME. We provide complete business setup solution to entrepreneurs who are establishing new company in Dubai. Visit our company formation services for more information.