Dubai Real Estate Sector exhibiting positive indicators of growth
Dubai’s burgeoning real estate economy has been driven by UAE’s focus on developing world-class infrastructure, supported by a highly tolerant, modern and technologically advanced society, a robust business environment, and sophisticated lifestyle choices. These factors have continued to make Dubai an attractive investment destination over the past decade. This is set to grow even further as vision Smart Dubai 2021 gets realized, and more transparent regulations, relaxed funding options and innovative projects hit the Dubai skyline.
The Asian diaspora leads the way in investment, with several other European countries following suit. According to data released by Dubai Land Department (DLD), 2018’s first quarter has already seen a cumulative number of 12,809 sales, with mortgage transactions crossing Dh49 billion. This and a promising forecast by industry watchers, predict that the property industry is geared up for phenomenal growth.
Whether buying or renting an apartment, it is always the investors who have driven Dubai’s vision of long-term progress. With an eye on the growth of the sector, the country put into place a slew of measures in 2007, beginning with tightening its laws and regulations. Basic tenets on contract clauses, deposit returns and stricter regulations for real estate offerings came into effect subsequently, to build investor trust.
Of late, the country’s ruler His Highness Sheikh Mohammed Bin Rashid Al Maktoum has introduced digital connectivity, disruptive technologies and transparent systems to fuel this growth. Using a unified strategy for implementation, these various measures are further poised to make the disparate real estate laws transparent, cohesive and streamlined.
Bin Mejren, DLD chief reiterates that the momentum built over the last few years, will bear fruit through 2018 and well into 2019. This bullish upswing will especially be seen in the mid-market and affordable segment. Keeping the focus on people every step of the way, has kept the momentum going in building the real estate sector thus far.
Besides the obvious regulatory changes implemented over the years, there are several other significant reasons for the positive outlook of industry executives and real estate agents.
– Return on Investment (ROI) – Dubai’s real estate offers average returns of 7% on any property, a good 2-3% more than that of international property markets. 2017 saw returns touching 15-20% even with investors paying as less as 50% of the property value. Affordably priced properties in locations like Dubai South, JVC and Dubailand are a likely reason for this. Indian investors especially get to avail tax-free returns of 8-10% and capital appreciation, as the dirham works against the dollar and is unaffected by currency fluctuations.
– Attractive Foreign Direct Investment (FDI) – Higher rental yields which translates to higher ROI, free capital and profit repatriation, innovative digital technologies, strong connectivity with world markets and sound regulations directly translates into foreign investment and business. The emirates has been consistently attracting investment opportunities from across the world which is set to grow even further.
– Exclusive Property Plans and Deals – Dubai property mavens afford investors plenty of options to invest their money. Off-Plan deals especially have shown remarkable returns in 2017. These plans allow property payments of upto 30% to be made even after handover, which helps investors earn rental income to cover costs. EXPO 2021 hopes to flood Dubai with several more new and exciting property projects across price points, while Rent-to-Own Schemes have generated renewed interest into alternative investment options.
There is no better time than now for investment into Dubai real estate. Local and international investors are showing renewed interest in buying property, and the government is leaving no stone unturned in attracting them. Having taken less than 30 years for the country to transform from a trading community to one the world’s most exciting business destinations, there’s more that the country has to offer citizens who invest in it.