The United Arab Emirates is a fertile and ideal environment for starting various types and forms of investment. It provides an endless range of housing units and real estate for sale in the Emirates and is a preferred destination for investors, business owners, and capital. That is mainly due to the highly developed infrastructure, which allows the initiation and development of various investments.
How to buy a property in Dubai?
The state also provides special advantages that encourage investment – mainly the purchase of real estate in the Emirates for foreigners and citizens alike, answering the question of ‘can foreigners buy property in Dubai‘ with a resounding affirmative. We can only mention the strong professional competencies and experiences that give the UAE a competitive investment advantage compared to other countries.
Its economic stability characterizes the United Arab Emirates. That, in turn, is the main reason for the increase in demand for investment in the country. The country ranked 25th in global competitiveness and secured first place in Middle East stability, per the Global Competitiveness Report 2019.
That is due to the country’s strategic location, financial reserves, and cooperative and friendly relations with countries worldwide that increase investments in them. And in addition to the country’s significant role in improving infrastructure and supporting innovation and technological digital transformation. We cannot neglect to mention the role of the free zones established by the state in various disciplines, as all of this has led, in one way or another, to an increase in foreign investment in the state.
The United Arab Emirates, represented by wise leadership, pays special attention to investment and always works to provide investment advantages and incentives that encourage business owners to start their investments in it. The most important incentives for investment in general and real estate investment in the UAE in particular are:
Investors in designated free zones get full ownership of their investments.
Investors have the full right to own more than 122 commercial activities and 13 state sectors within its territory.
Profit returns of up to 100%.
The state offers several advantages for obtaining real estate residency in the Emirates, as it launched the “10-year golden residency visa.”
High liquidity, economic strength, and full government support for the banking sector, which in turn provides numerous funds for various investments.
- Ease of converting foreign currencies.
- The strength of the UAE dirham among other global currencies.
- Low customs tariff on all goods, ranging from 0 to 5%.
All these advantages and incentives have created a fertile and distinctive environment for investment in the country. We cannot forget the political and social stability that makes the country a safe investment place. In this article, we shed light on real estate investment in the UAE, which may seem very easy and a traditional method with guaranteed profits. Still, like other investments, it may be risky because individual investors cannot predict the ever-changing and volatile real estate market.
The most important points before buying a property in Dubai
Dubai stands out with its higher rental yields, averaging 5-9%, surpassing many mature real estate markets. The city’s competitive advantage lies in its relatively lower prices per square foot compared to global counterparts, presenting an alluring prospect for premium real estate investments.
Additionally, the new residency visa laws associated with real estate investment extend a path for Dubai investors to secure residency visas subject to specific criteria, further enhancing the appeal of investing in this vibrant metropolis.
Investors who own real estate worth more than one million dirhams are entitled to a two-year residency visa. In comparison, real estate investors with a value of more than 5 million dirhams are entitled to Emirati obtaining a 5-year residence visa.
Investors with real estate holdings exceeding 10 million dirhams enjoy a generous 10-year residence visa privilege. Dubai’s favourable tax landscape, including exemptions from real estate taxes and stamp duties, distinguishes it from other global markets, augmenting its allure as an attractive investment hub.
These real estate investment rules epitomize Dubai’s commitment to fostering a compelling and investor-friendly environment, bolstering its reputation as a lucrative and enticing destination for property ventures.
The facilities offered by the state, under its wise leadership, stimulate investment. It enacted various laws on obtaining a long-term visa related to real estate investment and investors. Incoming investors in the Emirate of Dubai can obtain a 10-year visa if the investor owns real estate worth more than 10 million dirhams. In addition to other advantages represented in the 5-year visa, as is the case with the two-year visa.
The UAE is known for not imposing real estate taxes, as in other global countries, making it an attractive environment for real estate investment.
What advantages will you get when buying a property in Dubai?
Investing in Dubai presents many advantages, ensuring a path to a successful and rewarding venture while selecting the finest investment locales. The opportunities abound:
- Establish any business spanning commercial, industrial, or service sectors.
- Obtain additional residence visas by adding five more companies to your portfolio.
- Employ overseas workers and secure visas for them.
- Experience 100% tax exemption through the Dubai Investments Authority.
- Enjoy complete ownership without the need for local investors or external oversight.
- Transfer your company freely across Gulf Cooperation Council countries, offering unrestricted geographical flexibility.
- Repatriate your capital or funds abroad without hindrance.
- Acquire real estate and invest freely within Dubai and the Emirates, allowing seamless residency and investment integration.
- Access travel facilities to Europe and the United States of America through the Emirates Investment Authority.
- Obtain family residency, simplifying residence and investment in Dubai’s dynamic and thriving city. Embrace the exceptional benefits and embrace a prosperous future in this global investment haven.
Types of real estate investment in Dubai
There are pros and cons to investing in off-plan or finished properties on the secondary market. The financial capabilities of each person and the degree of his willingness to take risks differ, and here the importance of conducting an appropriate assessment of the risks associated with each emerges.
Pros of buying off-plan property
Price: Buying off-plan properties offers better options for investors in terms of price, as their prices are usually much lower than the prices of ready properties.
- Increase in the value of the capital: the property’s value is likely to increase with the progress of construction work and approaching completion and handover.
- Low down payments: The value of the initial payments when buying off-plan properties ranges from 5-10% of the property value, compared to 25% when buying ready-made properties, which is a great attraction for investors.
- Payment plans: Developers offer flexible and very attractive payment plans, and in some cases, the payment plan may range between 2-5 years after the handover, which means that you can put the property up for rent before you start paying.
Cons of buying off-plan property
Changes and fluctuations in the state of the real estate market: Falling price rates may lead to evaluating the property’s price at a lower price than the initial purchase price.
Project cancellation or delay in delivery: When purchasing an off-plan property, you may face the risk of project cancellation or delay in delivery after the specified date. Here, we advise you to conduct independent research on the developer to verify its record and reputation.
Pros of buying ready real estate
Price: Investors can get an advantage in price due to the market condition at the time of purchase. Buying a ready-made property with great discounts is possible. Buyers can currently bargain on the purchase price due to the market situation that witnesses the launch of new offers, which causes a decrease in prices.
- Location: Ready-to-go properties are often located in prime locations with well-developed infrastructure.
- Immediate Returns: When renting the property, investors in ready properties can earn returns directly.
- Stable Rental Yields: Investing in turnkey properties offers the added benefit of assured rental yields.
Disadvantages of buying ready-made real estate
First Payment: The minimum deposit required is 25% for expatriates to Dubai and 20% for UAE nationals of the value of the purchase price of real estate with a value of less than 5 million dirhams, according to the regulations of the Central Bank of the United Arab Emirates.
- Upfront costs: Upfront transaction costs can be estimated at around 7-8% of the purchase price.
- Timing: If you are relying on a mortgage loan to finance your purchase, it is essential to consider the time it takes for the bank to grant you the loan.
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