Contemporary style, high floors, easy to rent. Which Dubai properties are preferred by foreigners?

AX Blog
Contemporary style, high floors, easy to rent. Which Dubai properties are preferred by foreigners?

The popularity of the UAE and specifically Dubai as a tourism and relocation destination has been growing steadily over the past few decades. Nationals of other countries have often chosen to invest in real estate in the Emirates. Dmitry Zolotko, Senior Sales Manager, and Aram Grigoryan, Senior Consultant at AX CAPITAL (a real estate agency), explained what kind of real estate is the most popular among foreigners, what homes they prefer as buy-to-rent properties, and where things stand now, in the new political and economic reality.

Types of housing

Our experts are unanimous on that: apartments are becoming increasingly popular among foreigners. Aram Grigoryan says that clients are not looking for villas and townhouses as often and if they are, they are usually interested specifically in standalone houses. There are several reasons. Firstly, not everyone is ready to share a house with another owner or put up with small grounds. Secondly, a buyer could prefer a villa over a townhouse because the UAE living quarters are often underwhelming, people from other countries being used to more spacious premises. Besides, townhouse developments are more often sought by people who are going to relocate there for permanent residence, while apartments are convenient and practical as both buy-to-live and buy-to-rent properties. AX CAPITAL clients mostly have two mandatory requirements to homes: comfortable to live in and easy to rent out.

Dmitry Zolotko remarked that many buyers purchase apartments at the building commissioning stage because they plan to lease or sell them afterwards. Such investments can yield a return of 10% per year. The most attractive properties are waterfront or almost waterfront ones. In the latter case, Business Bay, Jumeirah Lakes Towers, and Downtown are the most popular business communities where you can lease a home to entrepreneurs starting their businesses in Dubai. The former option is often a great investment, where clients might be interested in investing in an off-plan property to resell it and see an annual return of 20 – 30%. Some buyers are looking for vacation homes and lease them out for the rest of the time.

Design and floor plan

The overwhelming majority of clients are selecting buy-to-rent properties, not homes for permanent residence, so they don’t have too many requirements to the interior design. Mr. Grigoryan noted that most apartments have standard floor plans, except, of course, in the luxury segment. However, if someone is ready to invest in an expensive project, they have a clear understanding of what exactly they want. In this case, the property is selected to satisfy all customer’s wishes.

Mr. Zolotko concurs. He says that people selecting buy-to-live properties have a series of requirements such as high ceilings, a certain number of bedrooms (usually at least two) with en suite bathrooms, designer interiors, and expensive finishing, e.g. with marble. Buy-to-rent properties, on the other hand, must satisfy minimum requirements. Investors are perfectly happy with practical floor plans and an inexpensive finish.

Requirements to villas’ architectural style

The experts agreed on this matter. Dmitry Zolotko emphasized that most clients preferred Mediterranean or contemporary styles with panoramic floor-to-ceiling windows. Aram Grigoryan named the same architectural solutions. He also shared that few were attracted by Arabian-style villas, while the Classical style was the least popular. Although contemporary villas sell better, a lot depends on location. For instance, homes in Port de La Mer, a community inspired by Montenegro, are in the Mediterranean style, but this does not make them less sought-after than modernist mansions in other parts of the emirate.

Apartments: floors, neighbors, elevators

As far as apartments are concerned, Aram Grigoryan noted that most buyers preferred upper floors offering stunning views. Mr. Zolotko shared more details: according to him, nationals of CIS countries almost always select apartments with views and are even ready to pay extra for that. On the other hand, buyers from other countries are less impulsive and, given the opportunity to save, would rather prefer a more affordable option, albeit without a breathtaking view. These emotion-driven purchases, however, could make sense, as such apartments will be easier to resell in the future, and at a higher price.

The Senior Sales Manager is often asked for homes with the smallest number of neighbors on the same floor. Buyers of both buy-to-rent and buy-to-live properties have this request. A smaller number of apartments per floor improves the quality of life and could also positively affect the return on investment, as tenants will be easier to find. Aram Grigoryan has not received any demands concerning the smallest number of residents per floor but people have indeed asked him for “decent neighbors”. Many other requirements, such as a home far from the elevator shaft, are more of an exception. This concerns people who are going to use their new apartment as a permanent residence. Many, however, are looking for a buy-to-rent property, so they have standard requirements, such as beautiful views from the windows, a high floor, and a large floor area. The latter is indeed a common demand, Mr. Grigoryan says, as the size of the property directly affects its liquidity.

Buy-to-rent homes: key requirements

The experts shared the most common requirements from clients looking for buy-to-rent options for investment purposes, who account for about 90% of the total number of customers. A frequent request is not only the liquidity of the property but also the ease of finding tenants. When it comes to selecting the district, many buyers believe that it’s easier to lease properties located closer to the sea. Some clients, however, are now considering real estate in emerging areas or in the downtown, for instance, near the Burj Khalifa skyscraper or the Dubai Mall. The reason is that seaside properties cost much more. The majority of investors, however, are still looking for waterfront and business communities. Another potential requirement is a comfortable floor plan.

Requirements to housing in the new reality

Requests of potential buyers are now changing under the influence of global events. Mr. Zolotko explained that a significant share of investors is looking to apply for a UAE residence visa, so they opt for either already commissioned buildings or those planned for completion in the nearest future. Many are even ready to pay extra for real estate to become eligible for a permanent residence permit.

Aram Grigoryan confirms it and adds that a residence visa enables expats to open an account at a local bank. That is why buyers of property in Dubai choose real estate worth over AED 750,000 (USD 204,000, or CNY 1.3 million): this is a mandatory condition to apply for a residence permit. Clients used to be interested in this option before too, but not at such scale.

The experts emphasized that the buyers’ key purpose used to be a lucrative investment, so they were choosing off-plan projects, even at the early stages of laying the foundation. This enabled them to resell the property later at a much higher price.

AX CAPITAL is a real estate agency in Dubai that deals with only tried and tested developers and sellers. We offer the most relevant properties to our clients and walk them through all stages of closing the deal. Purchasing a home in Dubai or any other emirate is easier with us.