Is Dubai Good For Real Estate Investment?

Is Dubai Good For Real Estate Investment?

A cosmopolitan, global trading hub with an ever-growing population and thousands of ex-pats relocating to Dubai annually, Dubai is a desirable place for real estate investment. After the long-awaited property decree passed in 2002, Dubai has experienced a massive construction boom. The move attracted overseas investors into Dubai's property market. With so many investment opportunities in the housing sector in Dubai today, you can either take advantage of ready-to-move-in properties or invest long-term.

Intensively regulated industry

Several laws and regulations govern real estate investment in Dubai to safeguard investors' interests.

The Dubai Land Department

All real estate and land transactions in Dubai are approved, organized, and documented by the Dubai Land Department. Moreover, the department offers 216 sub-services and 26 main services to clients in the real estate industry. They are land and title registration, licensing for real estate professionals, developing a legal framework for managing investments in real estate, and educating clients about relevant laws.

To help investors keep track of current real estate prices in Dubai, the DLD compiles and publishes, on its website, information about real estate transactions on a weekly and monthly basis.

Real Estate Registration Agency (RERA) – Regulatory Arm

The real Estate Regulatory Agency (RERA) was set up in 2007 to create legal frameworks and mechanisms to regulate the activities of real estate developments, brokerages, and owner associations to make the real estate market investment-friendly.

To protect the broader interests of the market and investors, RERA monitors all development projects on a financial and technical level. In addition to monitoring compliance by developers, brokers, and other licensed real estate professionals with applicable laws and regulations, RERA also imposes penalties for violations, including the cancellation of stalled projects.

Real Estate Investment Management and Promotion Center -Investment Arm

Real Estate Investment Management and Promotion Center functions as an investment division of DLD and promotes direct and long-term investments in real estate, in addition to supporting local and foreign investors.

Besides this, it contributes to creating a green economy to achieve sustainable development by promoting a stable and secure environment.

Are you interested in investing in real estate in Dubai? Read this first.

Immediate Residency

Dubai's investment-friendly visa programs cater to individuals who opt to invest in residential properties worth AED 1 million or more with a maximum of 50% of the property value under a mortgage that will grant them legal residency in the city. Individuals who own a jointly owned property are eligible to apply if each individual owns at least one million dirhams.

You must invest in residential properties, not commercial properties. In addition, the visa is only valid for freehold residential properties. To apply for this visa, you must have an off-plan property. If an investor owns real estate in the country, they can receive a visa for three to five years and keep it as long as they own the property.The property must be worth at least 1 million AED for a three-year visa and 5 million AED for a five-year visa.

Attractive Rental Yields

With attractive pricing and payment plans, rental properties remain the most popular choice for buyers looking to invest in a steady income. A typical ROI for ready properties in Dubai is 5% - 6%. An investor can also benefit from high demand for short-term rental and tap into the high tourism turnover in the city by investing in an apartment or villa and renting it out on a short-term basis, which is an increasingly popular choice for tourists looking for a "homely" and authentic travel experience.

Rent-to-Own Scheme (Ijarah)

Rent-to-own is a contract between a developer and a buyer, where the buyer saves for a down payment while also paying rent. Providing a clear legal framework for rent-to-own transactions, DLD launched a specific title deed register in response to the growing interest in rent-to-own.

By eliminating the requirement for a down payment of 25%, this arrangement allows buyers to enter the property market faster. In addition, developers can access a broader pool of buyers by entering into mutually beneficial agreements.

Favourable Taxing Conditions

Dubai's taxation system is renowned for its low taxes, which also apply to the real estate industry. An investor in Dubai gains maximum profit without paying property taxes or stamp duties.

Hot Spots to Fit Every Lifestyle

Real estate in Dubai is heavily influenced by location, whether on the coastline, in the city centre, or secluded in the desert. You should evaluate the market by considering its proximity to transportation, the quality of the house, the maintenance cost, the interest rate, and market conditions at the time of purchase.

Safe and Desirable

As a global trade hub and one of the world's premier financial centres, Dubai is home to more than 200 nationalities, while ex-pats and immigrant workers make up more than 80% of its population. This makes Dubai a melting pot where everyone feels welcome to call it home. The city is known for its safety, tolerant communities, and overall calm civic environment, making it one of the safest places to invest. One of the key factors that make Dubai a great place to start and grow your business is the city's global reputation as a city, market, and economy.

Final Thoughts

Still, relying on one source of income to make ends meet? With ever-increasing workloads and rising inflation rates, it is difficult to survive in today's economy. A single source of income is not enough. Due to this, people invest more to earn a side income or save taxes. But the question is, “Where should I invest?”. While there are several options in the stock market, there is also considerable risk. It is thus best to invest in things that appreciate. Given Dubai's mature real estate market, property purchased in Dubai will increase in value multifold. However, if not handled properly, investing in property can be just as easy to lose money as it is to gain it.

So before investing, read all of the regulations and points mentioned above. Happy investing!

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