Investing in Dubai Real Estate? Must check following before jumping in it
When it comes to investing in real estate, Dubai is considered as the top city to invest in it real estate sector. Some of the reasons Dubai is on top of the list as it contains world class properties, attractions like world’s tallest building, lifestyle, strategic location, low crime rate and more.
The infrastructure of Dubai, urban planning and connectivity make it hud not only with the middle east but all around the globe. The dynamic growth in the economy provides exciting opportunities from time to time to the investors. Now in 2024 these opportunities lie under the real estate sector and it’s a great time to grab this opportunity.
There are a total 23,297 transactions happening in the 1st Quarter of 2024 worth AED 72.08B. In 2023, the registered sales transactions reached 133,134, which is a significant increase compared to 96,459 in 2022. This records an increase of 38%, showing the highest performance for a year ever recorded, owing to the amazing performance of the off-plan transactions.
As Dubai has a lot of options It is important to look at the right property buying decision, you may be spoiled from a lot of choices, keeping in mind what you are looking for and either it will be your future’s secure investment you have to make the decisions accordingly. Market research and consulting with experienced professionals will allow you to move in the right direction. Here you will have some advice that you can follow if you are investing in Dubai’s real estate market.
Why to invest in Dubai REAL ESTATE
Before moving forward here is why you have to invest in Dubai Real estate in 2024.
Dubai is providing its investors high rental yields, No taxes on the property, Affordability, Profitable rental income, world leading rental yield up to 8% across units, also short term rentals earn average of 8% to 9% yearly, No annual property taxes, only a one time purchase fees which is only 4% of the property. Large number of developments, great tourism exposure, strategic location, room for price growth and more. SOUNDS GOOD, not here to stress you out by counting uncountable Dubai real estate.
Current Market Research
Clearly specify what kind of property you are looking for either a Villa, Townhouse, Apartments or an Off-Plan property. Clearly outline what specific aspects of the Dubai real estate market like property pricing, rental rates, legal rules and regulations, property trends, locations etc. You can check these on the available property portals like Dubizzle, Property Finder, Bayut, Property Monitor, DLD (Dubai Land Department) official website and also you can look for experienced real estate agencies websites they are also publishing real estate market news and stats around the real estate industry.
Property Location
Hopefully while doing property research you come to the point of choosing the area in which you are interested in buying the property. When it comes to investment properties location matters a lot, if you are having a beautiful property on the beach area like JBR your property will have a great exposure of gaining back rental values.
Choose the location as per your requirements and standards, it all depends on the investment purpose if you are planning to gain rent from your property, recommended is to buy a property near to public transport where Dubai Metro, Taxis and Buses are easily accessible.
Short term leasing or Long Term: Some properties perform better for short term leasing like DownTown Area, Jumeirah Beach Residence, Dubai Marina, Palm Jumeirah and gives good rental yield alternatively Arabian Ranches, Dubai Hills, JVT, Dubai Hills Estate properties provides great long term rental yield.
Property Type
What kind of property are you willing to invest in? The property type totally depends on budget, investment goals, personal preferences, and market conditions. You can choose from Apartments, Villa or townhouse, also you can go for off-plan properties which are very hot in the market and are available in the form of Apartments, Villas and townhouses.
Villas and townhouses are higher in prices as compared to the Apartments. These property types provide more space, privacy, and luxury compared to apartments.
Apartments are quite famous property types in Dubai. These are available in all of the famous areas of Dubai and are available at a good price as compared to the Villas and Townhouses.
Off -plan Properties are under development properties that you can get directly from developers. These properties can be grabbed by paying small amounts of payments on a monthly basis and can be delivered by developers after completion.
Commercial Properties such as offices, retail spaces, and warehouses can be viable investment options for those looking to diversify their portfolio. Considerations include Rental Yields, Tenant Profile, Market Trends etc.
Property Size
While living in Dubai everyone is very conscious about having a spacious living space. It’s highly recommended to check the size of the property and choose whilst. Familins always look for big spaces either an apartment or a villa. Having a big space will allow you to gain more rental yield and it will be easy for you to sell in the future. Property size is often correlated with price, so it’s essential to consider your budget when evaluating size options.
Engage with local experts
Discussing with local experts like real estate agencies, property consultants, lawyers, real estate brokers will gives you better ideas about buying a property in Dubai. As these real estate experts are familiar with the current trends, prices and also they have predictions about real estate future and its possibilities. Hiring a real estate agency in Dubai will helps you a lot in buying any property. As there are some rules and regulations that have to be follow while buying properties its highly recommended to look for these kinds of properties experts. These experts will guide you on where to buy and where not to.
Invest in Dubai Off-Plan Properties
Off-plan properties of Dubai are quite famous in 2024 and are great opportunities for investors. Why Off plan properties attract investors:
Payments Flexibility: The best thing with the off-plan properties is you do not have to pay the whole property amount together. You just have to pay some percent of advance payment and remaining all you have to pay during the property construction time period.
Capital appreciation: As the property gets developed and moves near to the completion stage the properties prices will increase respectively.
Quality and Modern Features: Off-plan properties in Dubai often feature modern designs, high-quality construction, and state-of-the-art amenities to attract buyers and tenants.
Early Entry into Emerging Areas: Off-plan properties provide an opportunity to invest in emerging or underdeveloped areas of Dubai that may offer potential for future growth and appreciation.
Potential Rental Yields: Off-plan properties can generate rental income for investors once construction is completed and units are ready for occupancy.
Check Property ROI (Return Over Investment)
Normally Dubai real estate ROI is between 6% to 8% of the property’s total price annually. You can calculate ROI as follows – Total Income per year / Total investment amount and then multiply it with 100, you will get a percentage of your property’s ROI.
Top 10 areas with highest rental yield in Dubai in 2023
Dubai Marina.
Dubai Hills Estate (Villas).
Jumeirah Golf Estates.
Jumeirah Beach Residence. …
Business Bay.
Downtown Dubai.
Palm Jumeirah Apartments.
City Walk
Must look at properties in these areas if you need a good ROI and above mentioned areas are best for investments also you can explore other areas as well.
Freehold Vs Leasehold
In Dubai you can avail two types of properties: leasehold (not much common) and freehold (popular), leasehold will not give you full hold on the property – you will not have full ownership and you just buy the property for some time, like 50 years, 100 years. But in freehold properties you have the full hold on it and you can sell it as you want – you will have the ownership. So before investing in the Dubai real estate market you must check about the property and buy as per your requirements.
