5 Reasons Why Investors are Crazy over Dubai Investment Market
Dubai has always been a hot spot for investors, especially foreign investors. With the Dubai Exp of 2020, the UAE is expecting an influx of foreign investors. With that being said, Dubai is also focusing on economic development as well as residential investment, which is one of the most important reasons for this investment anticipation. While the whole world is looking at the Dubai Expo of 2020 and wondering what will happen.
Here are five reasons why property investors are going crazy over the Dubai investment market and making their investment count
The footfall from the Dubai Expo of 2020
The Dubai Expo of 2020 is in October, and Dubai is expecting to attract around 25 million visitors from over 180 nations! Just the announcement of the Dubai Expo coupled with the number of foreign visitors has caused a massive increase in the number of Off-plan properties in Dubai that have been sold. The sales have sky-rocket like never before. That is because these investors have realised that over 25 million people are going to be staying in Dubai for a maximum period of 173 days during which they need a place to stay. Given the high rate of return on investment as well as the forthcoming increase in rental prices, especially due to the high demand for rental properties, real estate investors are making sure they make the most of the opportunity.
Dubai allows a resident visa based on property purchase
Basically, you can get a UAE resident visa if you have a property in Dubai. For this, you need to invest at least AED1,000,000 in real estate in an area that has been approved by the government, your property should have no mortgage and it should be totally liveable. If you are buying a property with more investors, the value of each investor must be over AED1,000,000. However, you cannot get a resident visa for undeveloped or developing, the property needs to be fully constructed and totally habitable. By doing so, real estate investors can apply for UAE citizenship.
The brain drain that is expected with the introduction of the Golden Visa
The Dubai government has come up with a scheme called the “golden card” residency permits which allow exceptional talent and wealthy investors to come into the country and get a visa for 10 years. This offer is open to wealthy investors who will pour millions and billions of dollars in the UAE economy as well as to extraordinary talents like doctors, engineers, exceptional students, artists, scientists etc. With an expected increase in the number of people who will migrate to Dubai, real estate investors are seizing the opportunity. They are buying property to rent to these potential golden card residents or even sell for a profit in the near future.
The population in Dubai is always increasing
Just from 2008 to 2018, Dubai has seen an 86 per cent increase in population. In just a decade, the population of Dubai has more or less doubled! People from all walks of life are moving to Dubai in search of better jobs, better pay packages, better homes, better business practices and overall just a better life. An increase in population means an increase in the number of people who need a place to live, and not everyone can afford to buy their own home. That is why, the rental income in Dubai is on the rise – a rise that is very lucrative for property investors.
Dubai offers an attractive ROI
One of the main reasons that investors want to invest in Dubai real estate market is because of the high return on investment. On average, the annual return on investment for apartments in Dubai in recent years was 7 per cent while the return on investment for villas for five per cent. This high ROI is even though the overall sale prices, as well as the rental prices, were down the last few years. If we do the maths, a real estate investor can easily recover the full investment amount in a short span of 12 to 13 years just with an 8 per cent annual rate of return – and that is why, real estate investors are flocking to Dubai to invest big bucks and recover that money in a short period of time. After that, the annual return on investment is just profit!
Other than this, the real estate market in Dubai is tax-free. That means property owners do not have to pay property tax in the future. Also, Dubai has a very low crime rate and is considered to be one of the safest cities in the world. So, an investment in such a safe and crime-free city is always a lucrative investment. Lastly, the UAE is aiming to become a knowledge-centric nation as opposed to an oil-centric one, which means there will be a massive improvement in development and infrastructure. Top-notch infrastructure is always good for the real estate market!