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Property in Dubai
2022 was a good year for the Dubai real estate market. It set up new records, though some things, like villas in Dubai for expats, remained popular. Let's examine the reasons behind the state's popularity and options in its real estate market.
The Popularity Of The Real Estate
What attracts potential investors and property buyers from all over the world?
1. The city is friendly to foreigners, regardless of nationality, religious beliefs, and culture. Suffice it to say that their share in the total population of the emirates reaches 90%.
2. The UAE is in second place in the ranking of the safest countries, according to a study by Global Finance magazine from 2021.
3. Dubai is among the top five cities in the world in terms of several indicators: infrastructure development, population diversification, security level, etc.
Real Estate In Dubai
Although many perceive Dubai as a city of millionaires, which is very expensive to live in, this is not entirely true. The capital of the emirate of the same name is far from the TOP-10: for example, according to the Mercer rating, it occupies only 31st place in the list of the most expensive cities, yielding not only to the recognized leaders of Hong Kong or Geneva but also to Beijing, Vienna, Oslo, and Washington. Additional benefits for potential buyers and investors in the real estate market are:
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● no tax on income, including from rent, for residents
● low mortgage rates
● the possibility of buying real estate (and renting it out in the future) remotely
● stable rental income in the amount of 5 to 15%
● the possibility of obtaining a preferential residence visa when buying real estate worth USD 205,000 or more.
Investment In Real Estate: How To Choose
There are several criteria for choosing real estate in Dubai, but the main ones are type (residential, office, etc.) and location. It is on them that the cost depends, as well as profitability, and hence the effectiveness of investments.
● Residential Properties
Against the backdrop of changes in the world, the cost of housing in the Emirates has decreased. However, many experts predict its growth shortly due to the lifting of coronavirus restrictions and increased demand for real estate in the UAE. Therefore, if you want to make money on resale, now is the best time to invest your savings in housing construction.
As for rental income, it is approximately 5-7% per annum. The studio will bring in about USD 15,000 annually, a 3-bedroom apartment - an average of USD 56,000. The profitability of one-room apartments and studios is higher and reaches 7.5%, while for larger apartments, it is around 5%.
It should also be noted that villas are less profitable than apartments, mainly because they cost more and pay off more slowly. However, there are exceptions: for example, in the Arabian Ranches area, houses pay off faster than some apartments and bring up to 6.4% per annum.
● Aparthotels
With the growing number of tourists, the popularity of this type of property in Dubai is also growing. Apartments combine hotel service with home comforts and are in demand among tourists traveling with families who need more space and business people who prefer a more comfortable atmosphere. In addition, the cost of living in an apartment hotel is lower than in a hotel of the same level; sometimes, the difference is up to 30%.
The average yield of such apartments is 8-10% per year. Short-term rentals in a coastal complex, which foreign tourists love so much, can bring up to 0.4% per week.
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● Offices
Another option for investing in real estate in the Emirates is purchasing office space. Class A buildings are always in price, mainly if they are located in the central areas of Dubai. And given the recent trend of moving businesses to the Emirates (not least because of tax incentives), you can easily find a tenant.
The average annual yield from renting office space and shopping centers fluctuates between 5.5 and 8.5%. As in other cases, a lot depends on the area, purchase price, etc. At the same time, commercial real estate in Dubai has several undoubted advantages over residential real estate. Firstly, the lease period is usually more extended, saving you time searching for tenants and concluding contracts. Secondly, the tenant traditionally pays the cost of maintaining such properties.
Real Estate Agency In Dubai
Considering your budget and preferences, AX CAPITAL agency is ready to offer you housing. Check out their website for the details. Ax Capital agency is there to help you choose and purchase real estate in Dubai. The agency specialists are highly qualified and will provide you with all the information about the recent market changes.
If you need a referral for an Agent in Dubai, Contact Kenna Real Estate Group