Dubai, a vibrant and diverse city, continues to captivate visitors from across the globe, whether for business or leisure. With the government’s attractive policies and developers offering amazing deals and flexible payment plans, foreign investors now make up 20% of Dubai’s property ownership market. The recent events, including the pandemic and the World Expo 2020, have also accelerated the growth of Dubai’s property market.
If you’re considering investing in Dubai’s real estate, it’s essential to be well-informed about key factors that can help you make the best decision based on your needs, budget, and long-term goals. Here are five important things you should know before taking the plunge into Dubai’s real estate market.
1. Work with a Registered Agent
While you may be tempted to hire a freelance broker, it’s essential to ensure that your agent is officially registered. Without a licensed and certified agent, you have no legal recourse if any issues arise during the transaction. To safeguard your rights, it’s best to collaborate with a licensed agent certified by the Real Estate Regulatory Agency (RERA) and specializing in the Dubai property market. Always request their official credentials to ensure you’re working with a reputable professional.
2. Focus on Dubai’s Popular Hotspots
Though Dubai is experiencing rapid property development, there are certain areas that stand out due to their excellent locations and high demand. Investing in prime locations can significantly impact your return on investment (ROI). Opt for areas that offer safety, convenient amenities, proximity to schools, transportation, and green spaces. DUBAILAND is one such prime location that is consistently sought after by investors. This expansive community features luxury residential projects by Dubai Properties, including Mudon Al Ranim, Villanova Villas, and Remraam, all of which offer stylish homes, family-friendly amenities, and easy access to key areas such as Downtown Dubai and the airport.
3. High ROI Potential
One of the main goals of real estate investment is to achieve a substantial return on investment. Dubai is currently an ideal place to invest, with some of the highest rental yields in the world. The city’s rental returns reach up to 10%, far surpassing other global cities like London, where the rental yield is only 3%. Investors looking to generate steady returns should consider purchasing buy-to-let properties, where ROI typically ranges from 5% to 6% for completed properties. With the influx of tourists and long-term visitors to Dubai, short-term rentals have become an increasingly popular choice, offering excellent potential for passive income.
4. Path to Residency
Dubai’s government has introduced various initiatives to attract foreign investors, such as offering residency permits for retirees and remote workers. Residential property investors can now gain legal residency in the city. The introduction of the 10-year Golden Visa program aims to further boost the city’s appeal to entrepreneurs and investors. To qualify, foreign investors must purchase a freehold residential property, not commercial property. The Golden Visa provides many benefits, such as the ability to open a bank account, obtain a driver’s license, and register a car in Dubai. The residency process is quick, typically taking just two weeks to complete, making it a hassle-free option for investors.
5. Investor-Friendly Laws
Dubai’s real estate market has flourished due to its low tax rates, high-quality properties, favorable property regulations, and reliable infrastructure. Furthermore, the government has introduced a new mortgage law to encourage more foreign investment. While the law is attractive, it does impose a mortgage cap: first-time buyers can secure financing for up to 80% of the property’s value, with a minimum deposit of 20%. For second-time buyers or those purchasing properties valued over AED 5 million, the mortgage cap rises to 40%. Additionally, purchasing an off-plan property allows for a lower down payment, often as low as 10%, with flexible payment plans extending up to two years.
Dubai’s real estate market is undoubtedly thriving, and with its favorable investment laws, competitive property prices, and potential for high returns, it remains an excellent choice for property investment. Whether you’re a first-time buyer or an experienced investor, Dubai is the perfect place to invest in real estate right now.
