Dubai’s real estate market stands out as a lucrative investment destination, offering a range of benefits for investors. Its performance and rebound since the pandemic has put it among the top global performers in the real estate prime residential assets class.
Dubai recorded its strongest ever performance with 1.6 million transactions (from sale-purchase to lease-rental agreements), with 166,000 real estate deals worth Dhs634bn in 2023. This represents a double-digit growth of 16.9 per cent compared to 2022, which saw 1.368 million transactions.
The city also drew in investors from around the globe, with the percentage of non-resident investors constituting 42 per cent of the total new investors.
With new developments being developed across the city, here’s a breakdown of the key advantages of investing in Dubai:
1. Prime residential property market:
In 2023, Dubai’s prime residential properties witnessed a remarkable surge in capital values, soaring by 17.4 per cent. This impressive growth outpaced the global average of just 2.2 per cent, as reported by Savills.
2. Competitive pricing
At $750 per square foot, Dubai’s real estate market remains relatively competitively priced compared to other global cities. This affordability attracts both international and domestic investors, seeking high returns on investment.
3. Forecasted growth
Looking ahead to 2024, Savills forecasts continued positive growth for Dubai’s prime residential market. Despite a slight moderation from the previous year, with growth expected to range between 4 per cent to 5.9 per cent, Dubai maintains its allure as a promising investment destination.
4. Rental price increase
Rental prices in Dubai surged by nearly 10 per cent in 2023, outpacing the global average of 5.1 per cent among other major cities monitored by Savills. This robust rental performance ensures steady income streams for property investors.
5. High rental yields
Dubai boasts high rental yields, standing at an impressive 4.8 per cent. This surpasses the global prime gross yield average of 3.1 per cent, offering investors attractive returns on their rental properties.
6. Low transaction costs
The cost associated with buying, holding, and selling property in Dubai is among the lowest globally, amounting to less than 10 per cent of the property purchase price. This favorable cost structure enhances the profitability of real estate investments in the emirate.
7. Stable economic environment
Dubai’s robust economy, supported by diversified sectors such as tourism, finance, and trade, provides a stable environment for real estate investment. Additionally, fast-tracked urban development projects and investor-friendly policies further bolster confidence in the market.
8. Strategic location
The secret to real estate success is “Location, location, location” as any real estate expert would tell you. And the city enjoys a strtategic advantage of being situated at the crossroads of East and West. The location combined with its access to regional markets makes it a hub for business and commerce. This geographic advantage enhances the long-term value proposition of real estate investments in the city.
9. Government reforms
Ongoing government reforms, including visa reforms aimed at attracting investors and expatriates, contribute to sustained demand in the real estate sector. Initiatives such as long-term residency visas and simplified visa processes further incentivize investment in Dubai’s property market.
10. Forecasted top performer
With Sydney, Dubai, and other global cities poised for growth in 2024, Dubai stands out as a top performer. Savills anticipates Dubai to continue its upward trajectory, with prices forecasted to grow by an additional 4 per cent to 5.9 per cent in the coming year.
11. Perfect storm of advantages
Investing in Dubai’s real estate offers a compelling opportunity for investors, characterised by robust capital appreciation, high rental yields, and a conducive regulatory environment. As global markets navigate economic uncertainty, Dubai’s growing real estate market is proving to be a safe haven in times of global turbulence.
