Dubai is filled with luxurious homes, but that isn’t the only reason why the world's richest are flocking to this real estate market.
The location in which you invest your money matters, and some regions can offer more opportunities to increase returns and reap the maximum benefit from your real estate investments. Dubai is one of them.
The business hub of Western Asia is proving to have the factors of a property market that holds its value. So much so that high-net-worth individuals (HNWIs) are increasingly attracted to Dubai, as one of the wealthiest of the seven emirates where they can take advantage of higher yields, favourable tax conditions, visa opportunities, and a luxurious lifestyle.
Dubai is one of the most preferred investment landscapes there is today. In this article, we’re exploring the reasons why.
5 Reasons HNWIs are Buying Luxurious Dubai Homes
Dubai’s luxury real estate market today offers unique investment opportunities that can’t be found in other major global cities. The differences Dubai brings to the table has HNWIs realising that investments here can be successful with minimal work.
But what, specifically, is so attractive about this market? Let’s explore the top 5 reasons why investors flock here.
1. Impressive GDP Drives the Real Estate Market
Dubai’s real estate market is one of the key reasons for the city’s significant economic growth, actively contributing to its gross domestic product (GDP) for decades. The Dubai Land Department’s (DLD) annual report Real Estate Sector Performance from 2020 and 2021 provides the following information:
--> In terms of value, Dubai’s GDP reached Dh407 in 2019 a growth rate of 2.2% from 2018. The real estate sector’s GDP contribution reached 7.2% in 2019, an increase of 3.3% from 2018.
--> Real estate transactions also grew in 2019. Transactions increased by 8% compared to the year before, with more than 57,000 real estate transactions recorded.
--> DLD forecasts 2020 will see additional growth due to the stimulus packages worth AED 7.1 billion to improve the economy and the Expo 2020 Dubai opening in 2021.
--> In early 2020, Dubai’s real estate sector GDP contribution achieved 8.2% an increase from 2019, even despite the pandemic. While there was a decline in transactions, the sector’s overall performance shows exceptional resilience and robustness, especially in the last months of 2020.
2. Booming Property Values
In addition to the real estate sector pushing Dubai’s GDP, property values are also increasing alongside them.
Dubai’s real estate market is strictly regulated by its government. All investors and developers are protected by and accountable to the Real Estate Regulation Authority (RERA), one that ensures that the market is more transparent and compliance-oriented than others of its kind.
With authorities highly regulating the property supply in Dubai, there is an increase in demand that will certainly keep prices on an upward trajectory, at least for the foreseeable future. In fact, CBRE real estate group (Coldwell Banker Richard Ellis) reported that Dubai’s residential property prices increased an average of 4.4% in the first eight months of 2021 the highest annual growth since February 2015.
Moreover, it goes without saying that properties in Dubai have unmatched luxury and glamour, providing ultramodern architecture at the largest scale for HNWIs to sweep up. From Dubai Marina to Palm Jumeirah and Dubai Hills Estate, you can find beachside homes and bespoke mansions unlike any other city on the planet.
3. Tax-Free Properties and Incomes
To quote Mark Nierada, a legal consultant in Dubai, “The UAE, of which Dubai is one of seven emirates, does not impose personal taxes no income taxes, no capital gains taxes, and no death taxes.” Dubai does this to attract skilled expats and international companies to diversify and enrich its economy.
The only direct tax on real estate purchase is a 4% charge, levied at the time of sale and based on the transaction value. Legally, both the buyer and the seller will pay 2% each. But, in most cases, the buyer will pay the full percentage.
While it’s true that there are other indirect taxes, costs, and fees in real estate transactions, there truly is no tax reason not to buy a home in Dubai. Additionally, Mark Nierada noted that buying is more favourable than renting, especially if you plan to hold the property for the long haul.
4. Remote Work Sanctuary
Dubai's luxurious living and sun-kissed lifestyle are well-known globally. In many ways, it also serves as the perfect place to work remotely, especially as the pandemic continues to affect us today.
In fact, Dubai has a new remote work visa programme that encourages individuals to live and work by the beach for a year, luring long-term travellers and HNWIs to enjoy the City of Gold while staying in touch with global companies. Those with families will also be glad to know that the programme gives you access to all standard services of Dubai residents, such as telecoms, bank accounts, utilities, and schooling.
His Excellency Helal Saeed Almarri shared, “Dubai is uniquely positioned to offer a safe, dynamic lifestyle opportunity to these digitally savvy workers and their families while they continue to work remotely, whether it is for a couple of months or an entire year.”
Moreover, the UAE is the world's most vaccinated nation. Buoyed by a quick distribution of vaccines, business activity in Dubai is approaching pre-pandemic levels, with 74% of its eligible population vaccinated. Its goal of reaching 100% vaccination will likely be met by the end of 2021.
5. Guaranteed High Rental Returns
Given increasing property values and the highest vaccination rates, Dubai continues to be a hub for world-class tourism, offering tailored destinations for regular individuals and HNWIs alike. This makes Dubai an ideal real estate market for rental properties with high returns.
In fact, Dubai offers rental yields of 6% to 10% rates that are unheard of even in mature markets across the world. Moreover, $1 million USD can buy more real estate space in Dubai than nearly every other cosmopolitan city, including Monaco, Singapore, London, Shanghai, and Mumbai.
Moreover, DLD’s annual report on the real estate sector shows the following growth in lease contracts:
Let Us Bring You to the City of Gold
With impressive growth and massive opportunities for real estate investment in Dubai, it’s no wonder that HNWIs are purchasing their slice of the City of Gold today. Nevertheless, they are doing so with expert guidance from professionals to seal deals with confidence, privacy, and guaranteed satisfaction.
As part of the world's most esteemed auction house, Christie's International Real Estate - Premier Estates brings you into the prestigious property market of Dubai, having helped multiple HNWIs purchase luxury homes here.
We are composed of the leading industry experts, seasoned with decades of experience in the most coveted markets in the world. Our localised knowledge enables us to offer exceptional home buying and selling services in Dubai, guiding you towards your desired home in the best way possible.
HNWIs, royals, and celebrities have trusted us for centuries. Contact Christie’s International Real Estate - Premier Estates to experience the same investment journey in Dubai to secure your home in one of the world’s most desired property markets.
