11 advantages of investing in real estate in Dubai
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The Dubai real estate market stands out as a lucrative investment destination and offers a variety of benefits to investors.
Its performance and recovery since the pandemic have placed it among the global top performers in the premium residential asset class.
Dubai recorded its best-ever performance with 1.6 million transactions (from real estate transactions to rental contracts), with 166,000 real estate transactions worth Dh634 billion in 2023. This represents a notable growth of 16.9 percent. percent compared to 2022, which represented approximately 1,368 million transactions. . The city also attracted investors from all over the world, with the percentage of non-resident investors making up 42 percent of the total new investors.
With new developments taking place across the city, here is a breakdown of the key advantages of investing in Dubai:
Prime Residential Real Estate Market:
In 2023, Dubai’s prime residential properties witnessed a notable increase in equity value, which soared by 17.4 per cent. This impressive growth exceeded the global average of just 2.2 percent, Savills reported.
Competitive price
At $850 per square foot, Dubai’s property market remains relatively competitively priced compared to other cities around the world. This affordability attracts both domestic and international investors seeking high returns on investment.
Expected growth
Looking ahead to 2024, Savills forecasts continued positive growth for Dubai’s premium residential market. Despite a slight moderation from the previous year, with growth expected to range between 4 and 5.9 per cent, Dubai maintains its appeal as a promising investment destination.
Rental price increase
Rental prices in Dubai increased by almost 10 percent in 2023, surpassing the global average of 5.1% among other major cities tracked by Savills. This strong rental performance ensures consistent income streams for property investors.
High rental yields
Dubai boasts high rental yields, standing at an impressive 4.8 percent. This exceeds the global average prime gross yield of 3.1 percent, offering investors attractive returns on their rental properties.
Low transaction costs
The cost associated with buying, holding and selling property in Dubai is among the lowest in the world and represents less than 10 percent of the property purchase price. This favorable cost structure improves the profitability of real estate investments in the emirate.
Stable economic environment:
Dubai’s strong economy, supported by diversified sectors such as tourism, finance and trade, provides a stable environment for real estate investment. Furthermore, accelerated urban development projects and investor-friendly policies further bolster market confidence.
Strategic location:
The secret to real estate success is “Location, location, location,” as any real estate expert will tell you. And the city enjoys the strategic advantage of being located 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 improves the long-term value proposition of real estate investments in the city.
Government reforms:
Ongoing government reforms, including visa reforms aimed at attracting investors and expatriates, are contributing to sustained demand in the real estate sector. Initiatives such as long-term residence visas and simplified visa processes further incentivize investment in the Dubai real estate market.
Best predicted performance:
With Sydney, Dubai and other global cities set to grow in 2024, Dubai stands out as one of the best performers. Savills expects Dubai to continue its upward trajectory, with prices expected to grow between a further 4 per cent and 5.9 per cent over the next year.
The perfect storm of benefits
Investing in Dubai real estate offers an attractive opportunity for investors, characterized by strong 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.
News source: Gulf Business
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