Real estate investments remain the most profitable in terms of the profitability of investments and its security. One of the most popular destinations is foreign real estate. The United Arab Emirates is one of the countries in demand in terms of buying real estate sector. The most famous city among foreigners is Dubai. Let’s find the information whether it is a good idea to buy a property in Downtown Dubai and what is the profitability of the purchase.
Features of investing in Dubai, UAE
Expats make up the majority of the population of the country’s largest metropolis. It makes real estate for sale in Dubai traditionally in demand. Not everyone is ready to buy an apartment in the property and not in all situations it is beneficial if we are talking about a seasonal vacation, a period of study or work. Therefore, apartments for rent are in demand all year round. At the same time, real estate helps to save money. The exchange rate of the local currency against the dollar is undergoing minor changes, so the cost of the object will remain consistently high. With the increase in demand for housing, prices will increase. It makes real estate liquid and profitable.
There are more than 60 free zones in Dubai, where Arab real estate is available for purchase in full ownership by foreigners. This allows you to choose between different communities of the city. The central part is just one of many in demand. Among tourists, the communities on the first line of the sea are in traditional demand: Palm Jumeirah and Dubai Marina. With the start of the Expo-2020 exhibition, communities, which are located within walking distance from the venue, are in high demand. These areas are the following: Dubai Marina, Dubai Sports City and Dubai Investment Park.
Why it’s worth investing in Dubai real estate
The pandemic situation has demonstrated that it is not always advisable to focus on stable wages. Investments in the real estate sector allow you to create a «rainy-day fund », as well as to receive a stable profit. A thoughtful approach to budget planning involves investing funds in order to preserve and increase it.
The reasons for investing in Dubai real estate are the following:
- Good geographical location. This is not only the center of international trade in the Middle East, but also a place from which you can fly to almost any of the developed countries of the world in just four-five hours. It really attracts visitors.
- A wide selection of properties for any income level: from a budget studio apartment to a luxury premium villa or an elite penthouse. Active construction is underway in almost all areas of the city and there is still plenty to choose from. In the prospects of reducing the development of the central part of the metropolis due to the banal shortage of available space. It will contribute to an increase in prices for the most attractive development projects.
- Affordable prices. Real estate in major cities of the USA and Europe is much more expensive. At the same time, the real estate sector of the city is fresh, if we talk about secondary housing. Active construction has been carried out only for the last few decades. You can get acquainted with the current prices in Mo’asher monthly report specially launched by the UAE authorities. It shows the real picture of the market.
- Consistently high income. The profitability of apartments for sale in Dubai can reach 6-7%, depending on the degree of comfort and the area of location. In London, this figure does not go beyond 3%.
- Net profit. There is no taxation of income from renting real estate in the UAE. Therefore, the owner receives a net profit legally.
- Affordable mortgage lending conditions. Banks are ready to take over about 80% of the total purchase amount, and the low interest rate allows paying debt obligations in a short time due to lease payments.
- The possibility of obtaining a resident visa when buying real estate. This is relevant in cases where it is planned not only to receive rental income, but also to live in the country.
- Legal security of the transaction. Each purchase and sale agreement is subject to mandatory registration with the Land Department, which minimizes possible risks.
Prices for apartments in Dubai
The final price depends on several circumstances at once:
- square meters.
According to Bayut portal, the average cost per square meter for July 2021 was AED 12,310 (over USD 3,350). This pricing policy concerns studio apartments. Compared to the same period last year, the growth was 13.88%. The minimum investment threshold for investments is USD 100,000. It is possible to find housing cheaper, but the probability that it will bring a high return is low.
The average prices for a studio apartment are the following:
- Discovery Gardens – from USD 128,000 to USD 149,000;
- Dubai Marina – from USD 190,000 to USD 245,000;
- Jumerian Village – from USD 125,000 to USD 163,000.
The prices for one-bedroom apartments are the following:
- Palm Jumeria – from USD 353,000 to USD 571,000;
- Greens – from USD 258,000 to USD 435,000;
- Down Town Burj Dubai – from USD 367,000 to USD 489,000.
The highest price is for premium class apartments and villas for sale in Dubai. In 2021, a record number of luxury real estate transactions were concluded, which confirms the revival of interest in the UAE housing sector. With the beginning of Expo-2020 exhibition, there is an increase in the interest of potential investors, so it is impractical to delay the selection of the object of interest. There is a high probability of further price growth not only in the last quarter of 2021, but also in 2022.
Professional assistance in buying real estate in Dubai
AX Capital real estate agency will help with the selection of ready-built and pff-plan projects in Dubai for profitable investments. Agents are also ready to find housing for permanent residence or seasonal recreation. You can get acquainted with the pricing policy of the market in real time. The database of objects includes apartments, flats, villas for every taste and budget.