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Why invest in Dubai?

 

 

 

 

 

 

 

Dubai Property for Sale Overview


Dubai is one of the most important business and tourism hubs in the world. Over the last few years, it has become an influential centre for business and now 80% of the world’s ten largest companies have offices in the city, with nearly 400 out of the Fortune 500 companies represented here.

Property in Dubai is one of the strongest real estate markets, having seen growth of over 25% in 2013. This growth has continued into 2014 and makes Dubai properties a very attractive investment. Dubai’s real estate sector has matured rapidly and is driven by demand and quality. Dubai’s excellent tax set-up has made it a very popular destination for investors interested in Dubai property for sale, resulting in one of the best rental markets across the globe.


Research Report on Real Estate Investment in Dubai - September 11, 2014

Property in Dubai has offered investors capital appreciation of 20% over the past 12 months, according to a new report.
Dubai property has offered investors more than double the returns of the region’s financial market over the past six years
Property prices in Dubai recorded a 20% year-on-year rise in the second quarter of 2014, according to a new report.

New research from Colliers International found that in the second quarter of the year, Dubai property values increased by 3%. The mainstream market enjoyed a more profitable period than the prime market, with Dubai apartments and townhouses outperforming the emirate’s villas.

A geographical breakdown shows residential property in Dubai Marina, Downtown Dubai and Jumeirah Lake Towers accounted for the largest volume of transactions, while developments in Palm Jumeirah and Motor City saw the highest year-on-year growth in sales prices.

Ian Albert, Regional Director at Colliers International, explained that the measures the authorities had introduced to safeguard the market are showing signs of working and price growth could be set to continue at a sustainable pace.

This year has already seen a large number of new properties launched due to the positive sentiment in the market.

Much of the positivity is surrounding the large-scale infrastructural investment that is set to accompany World Expo 2020. The event – the first of its kind to be held in the Middle East region – is set to help Dubai attract 20 million visitors on an annual basis and boost annual GDP in Dubai by 1.5% between now and 2020.

The Colliers report also showed how the Dubai property market has vastly outperformed the Dubai Financial Market (DFM) over the past few years. A property investment made in the first quarter of 2007 generated estimated returns of 70%, while a similar investment in the DFM only yielded a 30% return.

 

Ed James, author of the Gulf Co-operation Council Construction report 2015, explained the value of existing UAE contracts over the past 12 months was $52 billion (£31.3 billion), while new construction projects awarded in Dubai in 2013 were worth $20.6 billion.

 

Research Report on Real Estate Investment in Dubai - October 2, 2014

 

The rental yields associated with Dubai property have increased by 21.6% over the past 12 months.

Summary:

 

  • Dubai continues to offer some of the strongest property returns in the world

  • Over the last year, average rental rates across Dubai have increased by 26.1%

  • The mainstream Dubai apartment property market is outperforming the prime villa market

 

The Dubai property market enhanced its reputation as a property investment hotspot with new figures that show rental yields continue to increase.

 

Research from Reidin revealed residential rental prices rose 1% in August, leading to a yearly increase of 21%.

The mainstream market continues to offer higher returns to property investors, with the statistics highlighting apartment rents rose 1.19% last month and 24.1% over the past 12 months, while villa returns increased by just 0.03% in August and 9.4% on a year-on-year basis.

 

Property experts believe that the sustained rise in the emirate’s population will soon lead to a short supply of housing units, driving investor returns higher still. Only last month, Dubai authorities revealed that around 500,000 registration visas have been issued to new residents so far this year.

 

As Dubai gets closer to the start of World Expo 2020, a further rise in the population size and tourist numbers is anticipated. Businesses in the region need to attract more employees to capitalise, which in turn creates new demand for residential property in Dubai – especially in desirable relocation regions in the emirate, such as the sought-after Dubai Marina.

 

This will not only positively impact rental returns directly, but indirectly the wider economic effect will also help sustain property values as the emirate’s authorities roll out widespread infrastructural investments.

Since the bid win, several revenue-generating new megaprojects have been announced, including a new airport development and the Mall of the World.

 

 

An Investment Comparison

 

 

Lets take the example of two persons "A" & "B". Each of them invests US$ one million and analysis the outcome of his investment after two years;

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

This proves that the investment in the Dubai real estate can prove to be much more profitable than a regular business project.

 

 

Some of the highlighting points of real estate investment in Dubai;

 

 

  • Dubai named best city in the world for investments – Reputation Institute

  • New measures introduced for secure investments

  • Properties range from studios to penthouses over 1,700 sq ft

  • Dubai Marina property values risen 34% since 2012 – Cluttons

  • Property transactions in Dubai totalled AED 89 bn during the first half of 2013 – Dubai Land Department

  • Provides 10% rental yields – among highest in MENA region.

  • Rents paid upfront in 1 – 4 cheques for immediate benefit.

  • High capital appreciation – in excess of 25% in Dubai Marina (2013).

  • 0% income tax.

  • 0% capital gains tax.

  • 0% corporate tax.

 

All these facts make Dubai No. 1 real estate investment place in the worlds !

 

  1. Mr. A invests US$ one million in real estate in Dubai.

  2. His invetment capital gets an annual growth of 20% (by price appreciation of his property).

  3. He also gets an annual rent of 9% of his capital.

  4. He has to bear some expenses firts on the purchase and then on the maintance of his property of 5% in two years.

  5. His net profit after two years;                                    = 20% + 20% + 9% + 9% - 5% = 53% = $US 530000

  6. After two years, he decides to sell his property whose original value appreciates by 20% per year and he gets about 40% price appreciation for two years.

  7. In two year he also gets annual rent of 9% which means 18% for two years.

  8. Thus his property sale brings him a net valu of $US1530000 (US$ 1 million + No. 6).

  9. This is an increase of only 53% in the value of his original capital.

  1. Mr. B invests US$ one million in a grocery store business.

  2. His invetment capital does not yield profit in the first year and gets an annual growth of 12% in the second year.

  3. He has to bear some "running expenses in the first year which are met by nominal profit in the first year.

  4. His net profit after two years; =  12% = $US 120000

  5. After two years, he decides to sell his business whose original capital depreciates by 15% per year (30% for two years) but he also gets about 20% for two year as his goodwill making the net depericiation of 10% for two years.

  6. Thus his business sells for a net value of $US1020000 (US$ 1 million + No. 4 - No. 5).

  7. This is an increase of only 2% in the value of the original capital.

Because

It is like investing in 24kr gold !
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