Dubai is one of the top real estate investment destinations, drawing buyers from all around the world. The city is an appealing place to live and invest in since it successfully blends contemporary with history. Due to its advantageous location and thriving economy, Dubai has several benefits for property buyers.
According to Betterhomes Residential Market Report, Indian nationals continue to be the top buyers in the real estate market in Q2 2024. In the second quarter of 2024, Dubai achieved a record-breaking 40,584 property transactions, valued at AED104 billion, marking an impressive increase of 49 percent compared to the same quarter last year.
Why invest in Dubai real estate
Put simply, Dubai offers promising lucrative opportunities in terms of real estate investment. This boom can be traced back to the Freehold Law of 2002. Revolutionizing property ownership rules, the landmark legislation allowed non-UAE citizens to engage freely in buying, selling, leasing and renting properties.
Today, Dubai’s appeal as an investment destination is far from waning. A strategic geographical location, ambitious infrastructural projects, world-class amenities and reputation as a tax haven are key factors that attract investors locally and globally. And with the continuous influx of expatriates and tourists, there’s a steady demand for both residential and commercial properties.
Sales transactions
To date in 2024, more than 200 residential projects have been introduced, bringing the total number of off-plan apartments to close to 50,000. Quarter-over-quarter (QoQ) and year-over-year (YoY) increases in apartment transactions were 18 percent and 52 percent, respectively. It is anticipated that the industry would keep growing, offering profitable prospects to developers as well as buyers.
Leading developers have launched new master communities, including Emaar, Damac, and Aldar. Due to the fact that these communities frequently have contemporary facilities, prime locations and competitive pricing, these launches have increased interest and sales significantly. Incentives like post-handover payment plans, lowered service fees, and flexible payment options are another enticing feature. The residential market in Dubai’s Q2 2024 sales data shows different characteristics for townhouses and villas compared to apartments transactions dominate the villas and townhouses market, reflecting a stable and mature segment.
Rental transactions
A total of 106,181 rental transactions took place in Dubai in Q2 2024, demonstrating the city’s active rental market. But this number also shows a significant 21 percent drop from the prior time frame. Due to a lack of new rental inventory, high occupancy rates that limit turnover, and the fact that many renters are transitioning into homeownership, this reduction signals a slowdown in rental activity despite the overall high level of transactions. In spite of these obstacles, the market is resilient and still serves as the hub for rental property transactions in the area.
About 61 percent of these transactions involved the renewal of an already-existing lease, while 39 percent involved new rental agreements. In Q2 2023, a similar pattern was seen, with 41 percent of all rental transactions consisting of new contracts and 59 percent being renewals. The most sought-after locations for the new rental agreements were Business Bay, International City, Jumeirah Village Circle, Deira, and Bur Dubai. Since the epidemic, rental costs have increased significantly in several areas around the city, favouring landlords and changing the dynamics of the market.
Luxury housing
In Q2 2024, Dubai had a notable surge in real estate transactions. The luxury property market saw 664 sales, all valued at AED15 million ($4 million) or more. Given that secondary sales were more in demand than off-plan sales, the spike in transactions involving luxury real estate had a significant impact on the dynamics of the real estate market as a whole. Notable was the concentration of these high-value deals in strategic locations like Mohammed Bin Rashid Al Maktoum (MBR) City, Palm Jumeirah, and The Oasis (by Emaar).
Key insights into the luxury sales market
- A total of eight sales transactions in Q2 that were valued at AED100 million or higher
- The most expensive villa sold in Q2 2024 was priced at AED 240 million
- The most expensive apartment sold in Q2 2024 was priced at AED 148 million
Total rental transactions
A notable increase in luxury rental transactions was observed in Dubai in Q2 2024, as evidenced by the 164 rental agreements for houses with annual rates of AED1 million ($270,000) or more. Known for its premium real estate options and upmarket facilities, Palm Jumeirah, Mohammed Bin Rashid (MBR) City, and Dubai Hills Estate were the primary areas dominating this high-end market. About 60 percent of these luxury rentals were villas and townhouses, indicating the need for spacious, private living quarters in Dubai’s premium market. The remaining 40 percent were apartments, which are usually picked for their views of high-rises and ideal positions. The average size of townhouses and villas in Dubai was over 7,700 square feet, but the average size of luxury flats was roughly 3,600 square feet. This highlights the large living that Dubai’s wealthy people desire.
Read more: Most diverse countries in the world 2024
Why Indians invest in real estate market in Dubai
There are several reasons why Indians choose to invest in the realty sector in Dubai. This ranges from tax benefits, ease of doing business, high rental yields and the Golden Visa. Below are some points that elaborate them:
1. Robust real estate market
Dubai is one of the most robust real estate markets in the world, drawing in investors from all over the world. The city has a range of real estate, from reasonably priced apartments in Jumeirah Village Circle to opulent homes in Palm Jumeirah. Investing money here opens up the possibility of capital growth and diversification. Investors are drawn to Dubai’s real estate industry because of its steady expansion and development. The city’s thriving tourist sector and the flood of foreign workers looking to find employment maintain a high level of demand for both residential and commercial real estate. Dubai is a desirable location for investment because of its additional layer of security provided by laws created with the safety of investors in mind.
- Wide range of properties: Dubai has both luxurious and reasonably priced alternatives.
- Tourism and expat demand: Demand for residential and commercial properties is high among tourists and expatriates.
- Investor protection: A safe environment for investments is guaranteed by government rules.
- Long-term visas: Those who possess real estate can get permanent residence.
2. Economic stability
The economy of Dubai offers a solid foundation upon which you can secure your assets. It shows itself as a beautiful haven of economic stability in a world where the financial landscapes of the world are subject to sudden changes like sand in a desert. Over the years, Dubai’s visionary leadership has carefully reinforced the very foundation of the economy, transforming it from an oil-dependent structure to one that is based on tourism and international business. This has protected the economy from the notorious volatility that is often associated with economies that are primarily reliant on the exploitation of natural resources. Indian investors seeking secure havens in an uncertain world find Dubai’s resilient and strong economy to be an alluring offer.
Factors affecting economic stability
Let’s examine the list of elements influencing Dubai’s economic stability.
- Diversified economy: Move away from reliance on oil and towards international trade and tourism
- Stable politics: Politically stable conditions encourage international investment and strengthen economic resiliency
- Steady growth: Consistent economic development even in times of global recession is known as resilient growth
- Major events: The economy and real estate industry benefit from hosting events such as Expo 2020
3. Tax advantages
Dubai is a desirable location for real estate investment because of its mostly tax-free atmosphere. You will not pay any income tax or capital gains tax if you purchase real estate in Dubai. Potential investors find the offer much more alluring because it is tax-free.
4. Key location
Due to its strategic location between the East and West, Dubai is a centre for global trade and business. India is only a few hours away, which improves both the ease of travel and the investment prospects. Dubai has developed into a world-class city that draws people from all over the world. Your potential return on investment is strengthened by the steady demand in the real estate market that is brought about by this diversified mix of people living there.
5. Advantages of a strategic location
Let’s examine the location of Dubai’s strategic advantages.
- Global commerce hub: The best place for corporate growth and global commerce
- Travel ease: Short flight times to important cities in Europe, Asia, and Africa provide convenience in travel
- Consistent demand: A stable real estate market is ensured by a diverse mix of people
- Business networks: Access to large firms and chances for joint ventures
6. Modern infrastructure and development
Dubai is renowned for its cutting-edge infrastructure and ongoing development initiatives that raise living standards and property prices. Dubai is an even more alluring place to invest because of its dedication to sustainable growth. To establish a healthy environment, the city has been consistently working to reduce carbon footprint.
- World-class facilities: International airports, metro networks, high-speed internet, and medical facilities are examples of world-class amenities
- Sustainable development: Efforts to lessen expenses and environmental effect include solar-powered structures
- Ongoing development: Initiatives such as the 2020 Expo site raise the value of real estate
7. Advantage of currency
Compared to other major Indian cities, real estate investment in Dubai is more feasible and affordable due to the strength of the Indian rupee versus the UAE dirham. The current currency gap offers an advantageous opportunity for Indian investors wishing to establish a foothold in Dubai’s real estate market.
8. High rental returns
Dubai has appealing rental returns that are noticeably greater than those of other major cities worldwide. This guarantees higher long-term financial planning advantages and faster returns on investment. Dubai’s high rental yields provide a fantastic chance for long-term wealth creation and financial planning. These assets might provide a reliable source of income, which could be used as a retirement plan or even to finance aspirations such as launching a new business or funding your kids’ college tuition.
9. Business-friendly environment
Dubai’s business-friendly climate draws in foreign companies and provides a plethora of advantages for company owners. Purchasing real estate in such a supportive setting has the extra benefit of making it simple to launch or grow one’s own business. The following is a list of the factors that contribute to Dubai’s business-friendly atmosphere:
- Ease of doing business: The World Bank ranked it 16th
- Free zones: Free zones provide corporation tax benefits and 100 percent foreign ownership
- Business opportunities: Being close to large organizations might lead to joint ventures or partnerships
10. Secure environment for investments
Dubai’s strict rules and regulations guarantee a secure investment climate, safeguarding both international and domestic investors. Because of its open legal system that protects investors’ rights, Dubai is seen to be among the safest places in the world to make investments.
Most popular areas in Dubai
Jumeirah Islands, Mohammed bin Rashid City and Dubai South emerged as some of the most highly sought-after locations for property sales, driven by their strategic development and amenities. The most sought after areas for apartments this year were Jumeirah Village Circle (JVC), Dubai Marina, Business Bay, and Downtown Dubai. For villas and townhouses, Al Furjan, Arabian Ranches 3, DAMAC Hills 2, and Dubai Hills Estate emerged as the most popular.
Conclusion
For wealthy Indians, investing in Dubai is certainly a safe bet. The city not only offers all the world-class amenities which attracts buyers’ interest but also ensures a safe and secure environment where the possibility of cheating or fraud is out of question. Dubai has strict laws and regulations and everybody abides by them. Also, the city is thriving in terms of return on investment (ROI). Being one of the cosmopolitan cities with a great business apetite, Dubai certainly provides a good gains/returns on the investment. In totality, it is a win-win situation for Indian wealthy investors who plans to invest in the real estate market in Dubai.
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