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Dubai, a glittering jewel in UAE, has seen its property market soar to new heights, even during times of global recession. As Ahmed Almallahi, the CEO of Continental Real Estate (CRE), one of the leading real estate companies in Dubai, points out that while the instability caused by the recession, inflation in oil and gas prices, and increasing living costs in many parts of the world have led individuals and businesses to seek safer and more economically viable options, Dubai’s property market has remained exceptionally resilient and continually growing, even during economic downturns.
So what’s Dubai’s secret? Read on to know.
Dubai’s Robust Economy Provides Stability
Despite fluctuations in oil prices and economic downturns elsewhere, Dubai enjoys steady growth thanks to its business-friendly policies and diversified economy.
- The country’s GDP grew by 3.7% in 2019 and 4.2% in 2018, outpacing most developed economies. Even after contracting in 2020 due to COVID-19, Dubai’s economy has been rebounding remarkably quickly.
- Dubai ranks highly in economic freedom. Low taxes, minimal government intervention, and competitive business regulations attract a range of foreign investment.
- Dubai’s economy is diversified across trade, tourism, real estate, finance, and retail. This insulates it from over-reliance on oil and gas, which, to the surprise of many, contributes to a minuscule percentage of Dubai’s economy. Moreover, especially after COVID, the tourism industry of Dubai has really taken off.
New Policies Attract Foreign Investment in Dubai Real Estate
The government has introduced new policies making it even easier for foreigners to invest in Dubai’s real estate.
- One of the biggest changes is allowing certain real estate investment funds to operate in the emirate who can now buy and sell properties, along with carrying out developments, in turn, opening up many opportunities for investors.
- To encourage more foreign investment, the government has also reduced transaction fees for property deals, ensuring higher returns for investors.
The new policies, combined with Dubai’s open property market and strong regulations protecting foreign buyers, create an ideal environment for investment.
Dubai Property Market Sees Surge in Demand
Despite global economic uncertainty, demand for Dubai real estate is surging by an impressive amount. Transactions in Dubai’s residential property market jumped nearly 44% in February 2022 compared to 2021. As a result, rents and property prices in Dubai are skyrocketing.
What’s fueling this boom you ask?
- Economic stability, as mentioned before: For starters, Dubai’s handling of the pandemic and reopening of its economy has given investors confidence.
Almallahi explains, “Dubai has become an attractive destination for high-net-worth individuals, billionaires, and celebrities due to its tax-free status, safety, and vibrant lifestyle. The city’s population has surged, attracting millions of residents from various parts of the world.”
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- Growth in luxury real estate: Political and economic stability, attractive financial regulations, tax-free status, and the well-renowned Dubai-style extravagance has made way for the luxury residential property market in Dubai to flourish massively, even in the face of global economic uncertainty. Dubai was ranked as the busiest market for ultra-luxury homes in early 2023, with over 90 deals totaling $1.7 billion for properties worth $10 million or more.
- Profitable investments: The Dubai property market offers immense opportunities for both buyers and investors. Attractive payment plans have been implemented in the country for purchasing new off-plan properties at low upfront costs. Furthermore, strong rental returns and capital appreciation potential offers opportunities for highly profitable investments.
- Dubai, a tax-free haven for property investors: Dubai offers one of the most attractive tax regimes in the world for property investors. There are no property taxes, income taxes or capital gains taxes payable on Dubai real estate, ensuring that investors can retain 100% of the rental income and profits from properties.
- Safe city and Efficient infrastructure: “Dubai offers a mix of metropolitan cities like New York and Monaco, with the added advantage of safety,” Almallahi emphasized. The city’s low crime rate and robust police system have made it one of the safest places globally. This security, along with an efficient and paperless government infrastructure, has facilitated smooth and quick real estate transactions, often completed within as quickly as 24 hours.
With its thriving economy, gorgeous architecture, and nearly year-round sunshine, Dubai epitomizes an aspirational lifestyle that people across the globe want to buy into. Demand for residential and commercial property in Dubai has skyrocketed over the past two years; and the market is expected to continue accelerating at a rate of 20-25% annually over the next few years. For those seeking an exciting opportunity in a dynamic city, Dubai property investment ticks all the boxes.
