Top 10 reasons to invest in real estate in Dubai

Not only is real estate in Dubai a comfortable place to live, but also a reliable and lucrative investment asset. Buying a property in the emirate will protect your money from inflation and provide a source of stable income. In this article, we are going to tell you about 10 main reasons to choose Dubai for investments in 2023.

Contents:

• High rental returns
• Paying rent for a full year in advance
• Zero income tax for individuals
• Dubai’s growing market
• No commission to the agency when renting out property
• Long-term asset value growth
• Zero inheritance tax
• Lifestyle
• Safety
• The opportunity to get a residence visa
• A sound development strategy
• We can help you purchase real estate in Dubai for investing

High rental returns

According to David James, the AX CAPITAL consultant, Dubai real estate provides a high rental return compared to properties in any other part of the world. For example, in the UK, a return on investment (ROI) of 5% per annum is considered to be an excellent option. In Dubai, the ROI can be as high as 13%. The exact figures depend on the project, the location, and the type of rent chosen short-term or long-term.

Paying rent for a full year in advance

Unlike many European countries, rent in Dubai is not paid monthly, but a whole year in advance via a bank cheque. It is possible to negotiate with a landlord the annual rate being divided into a certain amount of payments. Tenants generally write from one to four cheques. As a result, the property owner receives a large sum at once, which is particularly advantageous if the housing was purchased using a mortgage or installment plan with a post-payment after handover.

Zero income tax for individuals

Individuals in the UAE do not pay an income tax. This is also true for rental income, which is quite different from the situation in many countries around the world. For example, in Russia, you have to pay between 4 and 30% of income, depending on a tax status. In the UK — from 20 to 45%, in Germany — on average from 15 to 47%. In Dubai, there is no need to give part of your income to the state. Everything that the investors earn from renting out the property stays on their account.

Dubai’s growing market

Dubai is a young city. It has existed within its current borders for a little more than 50 years, and now it is a fast-growing metropolis and a rapidly developing market. According to the Dubai Land Department (DLD), from 2020 to 2022 the total number of real estate transactions in the emirate increased by 2.4 times — from 51,414 to 122,658 deals.

New neighbourhoods are being built in the city, which gives investors an opportunity to buy off-plan property. According to Ruslan Sharipov, the AX CAPITAL broker, while there is no infrastructure in the community, the housing there can be purchased at a price lower than the market. However, as the amenities appear (parks and squares, schools and shopping centres, entertainment venues and attractions) the real estate in those developments becomes considerably more expensive. This is what happened in such areas as Mohammed Bin Rashid City, Dubai Creek Harbour, Emaar Beachfront, and Dubai Hills. A relevant example is the young Maritime City community, which is being actively developed today. In two-three years there will be a luxury waterfront area with premium residential and commercial real estate.

No commission to the agency when renting out property

In contrast to many cities in the world, in Dubai, the owner does not have to pay the agency that rents their property. In a number of European countries, the landlord is obliged to pay a certain percentage of the rent to the agency for technical management each month. For example, in Britain this payment is about 8%, so the owner loses a significant amount of money. In Dubai, the tenant pays a one-time fee, and that is all. No additional expenses are required from the investor.

Long-term asset value growth

Property prices in Dubai are steadily growing. In 2022 along, the average cost of one square metre of housing in the emirate has increased:

• For finished apartments — by 14%
• For off-plan apartments — by 17%
• For finished villas — by 8.5%
• For off-plan villas — by 23%.

Zero inheritance tax

This is a truly significant factor, which allows you to pass savings to relatives without losses. According to Aram Grigoryan, some clients from Europe intentionally sell real estate in their home countries and buy assets in Dubai so that their children could inherit their fortune.

Lifestyle

Dubai is a beautiful and rich city with luxurious restaurants, hotels, beaches, spas, and entertainment for every taste. The real estate purchased here can be used for living and recreation or rented out so as to generate passive income. With a short-term rental strategy, you can combine both options.

Safety

Another significant factor is safety. Dubai is one of the top 10 safest cities in the world. You can leave your apartment without locking the door and not worry about being robbed. In addition, many residential complexes in the emirate include their own video surveillance system and 24-hour security.

The opportunity to get a residence visa

Buying a property in Dubai will allow you to get a long-term UAE residence visa — for two or five years, depending on the amount of money spent on real estate. The minimum limit is AED 750,000 (USD 204,000). It is enough money to buy a spacious studio or a fully decorated and furnished apartment with one bedroom. You can also find affordable options with two bedrooms.

The residence visa will allow you to use the UAE banks and freely run a business in a country with a developed economy, comfortable tax system, and many bonuses for entrepreneurs. You will also have access to the UAE medical facilities, be entitled to educate your children at local schools and universities, obtain a driver’s licence, and so forth. On a day-to-day basis, a residence visa in the UAE is very much like citizenship.

A sound development strategy

The city is not developing spontaneously. The government of the emirate has established a master plan for Dubai until 2040, which aims to improve the quality of people’s lives as well as strengthen the city’s global status. It is a comprehensive plan for the sustainable development of the city, where a lot of attention is paid, in particular to energy-saving technologies.

The difference between Dubai 15 years ago and now is evident to the naked eye. The rational strategy of the local authorities has made it one of the most attractive places to live in the world.

We can help you purchase real estate in Dubai for investing

If you are considering investing in real estate in Dubai, then contact AX CAPITAL. Experienced professionals will find a promising option with a high ROI that will fully meet your goals and objectives. We have an in-depth knowledge of the real estate market in the emirate and work directly with the best developers in the UAE. Just send an application form and we will contact you and answer all your questions in detail.