future of investing in real estate in dubai

Investing In The Real Estate Market In Dubai

Buying a house could be a good investment for many of us. If you are not living in the house, there are many other options for what to do with it. You can rent it and get some good returns every month. You can resell it when the prices go up. You can keep it and give it to your children to do whatever they want. Buying or investing in a property in Dubai is a better option. This city is quickly expanding and growing while remaining safe for families. If you wonder what the future of real estate investment looks like in this city, you have landed on the right page. Discover the benefits and risks of buying or investing in property in Dubai.

What is the future of real estate in Dubai?

Though global factors have affected the prices in Dubai, reports show increased transactions. For example, after the Ukraine-Russia crisis, the United Arab Emirates followed in the footsteps of the United States of America. It raised its interest rate by 1.5 per cent because of the exacerbated global inflationary pressures due to the crisis. To attract foreign investment, the UAE announced the Golden Visa. As a result, the market’s affordability is expected to persist, with more deals closing due to the supportive measures.

Indeed, Dubai will remain a good place for real estate investment. Many foreigners are choosing to settle here for good, supporting this prediction. Yet, it is not all good. So let’s learn about the benefits and risks of investing in real estate in this city.

The Benefits of Investing or Buying a Property in Dubai

Residence visa relaxation

If you buy a house in Dubai, you will be entitled to an investment visa for ten years. Yet, you need to make sure you can check all the following boxes:

  • The real estate is worth AED 1 million and up
  • The property is not under mortgage
  • The property is not off-plan.
  • The asset should remain unsold for at least three years.

As for the process for gaining the visa, after you receive clearance from the Dubai Land Department, the Dubai Economic Department will issue a trade license on that property after receiving a copy of your passport and the title deed.

But you cannot apply for the Golden Visa. You can apply to the Immigration Department for a 2-year resident visa. Invest more than AED 2 million in a property. In addition, you will be eligible for a 10-year renewable Golden Visa if you retain ownership of your property.

Enjoy a high return on investments in the property

Because the population of this city is forever growing, the real estate investment market has matured. You will get good returns if you buy a house and try to sell the property later. Renting a home can be an excellent option if you want to keep it and make money. Dubai has a minimum rental yield of 5%, higher than many other major cities worldwide. All you need to remember is to choose areas that can get you the highest rental incomes, such as Dubai Hills Estate and JVC neighbourhoods. These returns will further enhance because Dubai has no annual taxes to pay.

Low cost for the high-standard property

Compared to major cities around the world, Dubai offers you the chance to get a very high-standard property for lower prices. You will need to pay 30% to 70% less in Dubai than in most other big cities worldwide. In Dubai, you will get luxury features like video surveillance, a swimming pool, a well-equipped gym, and high-speed elevators that you do not always find in other big cities.

The Risks of Investing or Buying a Property in Dubai

Possible decline of the economy

The UAE depends heavily on oil production for its income, just like many other Middle Eastern countries. With the increased awareness of the destructive effects of oil on the environment, oil consumption might fall in the future. However, the UAE government, on the other hand, is cognizant of this risk and is already taking steps to boost other areas of its economy.

Not choosing the right area to invest in

Although most of Dubai is extremely good, some parts need more facilities than investors, prospective property owners, and renters demand. To get the benefits you desire, pick something different from these areas. It is better to research and discover which areas will give you the highest yields.

Oversupply problem

As we mentioned before, the city is vast and rapidly growing. Therefore, it is no surprise that hundreds of high-rise office buildings and residential structures are empty in some parts of Dubai.

Dubai’s residential occupancy rates are now between 30% and 40%, with offices at the higher end of that range. These occupancy rates can lead the prices to decrease in the future, and the supply will be much more than the demand.

Now that you know the benefits and risks of investing in a property in Dubai, will you consider giving it a try if you have the money needed? Are there other risks or benefits you would like to add to our list? You can mention all of that in the comment section down below. But, as is always the case, we cannot wait to hear from everyone.