In this article, we discuss the various factors that have contributed to the rise of foreign property investors from Europe.
Anthony Joshua and Oleksandr Usyk square off at the pre-match press conference. Courtesy The National.
According to the latest statistics, Indian nationals are the most prominent property buyers in Dubai, but European nationals from countries like Russia, Italy, U.K. and France are also among the top five property buyers in the UAE.
British nationals are known to be property investors in Dubai. Russians, on the other hand, are heavily investing in the city's property market due to the consequences of geopolitical events.
In this article, we'll discuss the various factors that have contributed to the rise of foreign property investors from Europe. Among these are the increasing number of French and Italian nationals in the country.
The demand for residential property was boosted by geopolitical developments and instability in Europe, mortgage buyers waiting for the next rate hike and a high rate of inflation.
So, why do European buyers invest in Dubai?
Despite the dominance of Europeans in the real estate market in Dubai, a significant increase has been seen from Western European countries, primarily France and Italy. This is due to the increasing number of Western European nationals who are looking to purchase luxury properties in prime locations around Dubai such as Palm Jumeirah, Downtown Dubai and Dubai Marina.
Golden Visa
The UAE’s Federal Authority for Identity, Citizenship, Customs, and Ports Security (ICA) has issued a new executive regulation regarding the entry and long-term residence for expats, which will be implemented in September 2022. The new regulations will allow foreign nationals to enter the UAE for up to 10 years. It will also allow them to extend the stay of their Green Residence and Golden Visas. The number of entry permits and visas for tourists and relatives have also been expanded.
The new regulations also include an integrated system and a new long-term residence visa. The UAE is aiming to attract investors, entrepreneurs, highly skilled workers and self-employed residents.
The new regulations have been a game-changer for foreign investors. They now allow them to stay in the UAE for 10 years without a national sponsor and with 100% ownership of their properties. This will attract more Western European nationals over the next couple of years.
Another great benefit of the new regulations is that foreign investors can now get the golden visa through real estate firms. This will allow them to take advantage of the rising demand for property.
Tax Free City
One of the main differences between Dubai and other international cities is that it does not impose property or income taxes. This is a huge advantage for foreign investors who are looking to invest in Dubai. They are not subject to capital gains taxes, income taxes or property taxes.
This means that they can rent out their properties without worrying about the additional costs. This makes Dubai an attractive investment destination.
High ROI
Compared to other global markets, such as Hong Kong, London and New York, Dubai offers investors higher rental yields. Even in prime locations, such as Downtown Dubai, these properties can offer double-digit returns.
This is exceptional for French and Italian investors, as compared to other cities, where yields typically range from between 2 to 4%. Both France and Italy have average rental yields of around 3%.
Due to the high demand for real estate in Dubai, investors can now charge higher rental rates and sell their properties quickly. This allows them to get a faster return on their investment than they would in other markets. Even though the prices of real estate in Dubai are still rising, this can still provide investors with a significant capital gain.
Summary
Due to geopolitical instability, many European investors are shifting their business operations to Dubai. The city has a stable economy and is an ideal location for international investors.
The Euro has depreciated against the dollar. On the other hand, the dirham of the UAE has been set at a fixed exchange rate, which means that it doesn't have to deal with financial losses caused by fluctuations in the exchange rate.
European investors have been able to benefit from the stable real estate market in Dubai. This allows them to hedge against the depreciation of their currencies. They can also benefit from the strengthening dirham's capital appreciation. This is because the federal reserve of the UAE has maintained its aggressive monetary policy.
If you're planning on investing in Dubai, now is a great time to get started. The city's real estate market is expected to continue growing, with high returns compared to other global markets.
