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Property has been one of the most desirable investments globally for the past 25 years and it is certain that the Dubai real estate market offers some of the most attractive rental yields in the world. If you are considering investing in properties in Dubai, this blog will provide you with an overall idea about the real estate market in Dubai.
Acquiring properties is a great way to build wealth and generate income. However, to yield the highest possible returns from the properties, there are many factors to consider when investing in Dubai real estate market.
The city offers higher rental yields than many other mature real estate markets around the world. On average, investors can achieve gross rental yields of between 5-9%.
Property prices per square foot are lower compared to many other cities in the world, making Dubai one of the most affordable locations to own prime real estate.
New visa laws linked to property investment enable investors to gain a residence visa subject to certain rules and regulations.
> For properties valued above AED 1 million, a person may be entitled to a 2-year residency visa.
> For properties valued above AED 5 million, a person may be entitled to a 5-year residency visa.
> For properties valued above AED 10 million, a person may be entitled to a 10-year residency visa.
> The absence of property taxes and stamp duties in U.A.E. will create and promote a highly attractive investment environment for investors.
A strong return on investment (ROI) is the ultimate objective of an investor when investing in property. Given below are some of the factors that could influence ROI:
• Location of the property
• Facilities and amenities available in the community, including proximity to transport, education, childcare etc.
• Quality of living
• Maintenance costs of the property
• Size of the property
• Market conditions and timing of purchase
• Interest rates
During the beginning of 2019, Dubai Silicon Oasis (DSO) offered the highest gross returns of 9.5% for apartments. Followed by Meydan and DAMAC Hills, offering gross rental yields of 9.3% and 8.9% respectfully, again for apartments.
For villa and townhouse communities, Town Square yielded the strongest gross returns at 7.8%, followed by The Springs (6.6%), Reem – Mira (6.4%) and Mudon (6.3%).
Investing in ongoing property and ready property have its own pros and cons. Everyone’s financial situation and management of risk is unique, and as such, it is important to identify and understand the risks between these two types.
• Buyers generally receive a price advantage due to the fact that the property is under- construction and the price would be significantly less than the completed properties.
• High probability for price increasement of the property upon the completion and handover.
• Initial deposits start from 5-10% and developers offer highly attractive, flexible payment plans to promote and attract investors.
• Downward movement of the property market will result in the property being valued at less than the initial purchase price.
• There is always the risk of projects being cancelled or completed after their scheduled date.
• In line with UAE Central Bank regulations, the minimum deposit required for expatriate owning a completed property valued at less than AED 5 million is 25% and 20% for Emirates.
• If obtaining a mortgage to finance your purchase, it is important to take into consideration the turnaround time of your chosen bank.
• There has never been a better time to invest in Dubai. If you are looking to invest in affordable prime real estate under credible and reputed developers, please contact our experts and we will provide you with the best, most reliable solution in the market, depending on your requirement, and assuring you a profitable yield.
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