Post-COVID investment: 5 reasons to invest in Dubai real estate
Despite the negative global impact of the pandemic, the Dubai Land Department (DLD) recorded 51,414 transactions in 2020, according to the annual report it issued for the year(1). These transactions added up to a cumulative value of more than Dh175 billion, underscoring the robust fundamentals of the market; the proactive way in which the Dubai government managed the COVID-19 crisis; as well as the effective implementation of economic stimulus initiatives.
In effect, the overall stability of the Dubai economy, the successful vaccination roll-out, the premium developments that the city offers investors as options, the upcoming Expo, and many more such positives, appear to have successfully blunted the negative consequences of the crisis that unfolded in 2020.
Here are the top 5 reasons that Dubai real estate continues to be an attractive option for investors, both local and international:
- Well regulated market: Recent government initiatives have led to greater transparency and accountability in the Dubai real estate markets. An already well developed framework of rules and regulations has recently been strengthened further, with the launch of escrow accounts for jointly owned properties(2); a three year rent-freeze law(3); and several other measures to boost investor confidence.
- Low Tax overheads: From no direct taxation attracted by properties, to some of the lowest fees in the world, associated with their sales and purchase; Dubai’s very reasonable regulatory overheads add to the attractiveness of the emirate, as a real estate investment destination.
- High living standards: In recent years, the Dubai government has introduced several people-centric measures, which aim to enhance the livability of the city. In fact, the emirate has set its sights on being the best in the world, in terms of progressive and resident-focused development. State of the art infrastructure, healthcare, lifestyle amenities, and recreational facilities, are making the city one of the most desirable places to live in, globally – adding to the incentives for investors looking for returns, as well as buyers looking for a home.
- Low risks, with high returns: Dubai’s combination of robust legal protections, and high rental yields, is set to be further enhanced by the market’s return to a phase in which properties accrue value, over time. After a period of relatively low, or negative growth, Dubai real estate prices are now beginning to rise steadily(4) – making the sector a source of both consistent ongoing returns, as well as lucrative long-term rise in value.
- Property related visas: Dubai is redefining itself as a truly cosmopolitan and future-ready metropolis. These factors will reposition the city in global geo-economic-political equations and reflect positively in the residency visas announced recently, many of which have a real estate component for eligibility – a transformation that is bound to drive market activity and valuation, in real estate.
Dubai, the city of the future
Dubai’s meteoric rise, in the first few decades of its existence as a sovereign emirate, was – quite literally – ‘fuelled’ by its oil and gas reserves. In recent years, the successful diversification of its economy has led to Dubai emerging as a commercial hub, which hosts the regional headquarters of some of the largest and most iconic businesses in the world.
The next phase of Dubai’s development has been linked by the emirate’s government, with a vision to position it at the very top of social parameters, and human development indices. This is a growth trajectory that will also drive the city’s already well-established real estate markets, to becoming some of the most sought after and investor-friendly, globally.
In a world looking for stable, growth-oriented, and high-return investments, Dubai real estate ticks all the boxes that institutional as well as individual investors are looking for. With ‘building back better’ now squarely on the global agenda, the Dubai administration and business community’s future-ready approach to growth are ensuring that the city’s property markets will emerge as a star performer, in global real estate.