Complex Made Simple

Look who’s investing $41bn in Dubai

The Dubai real estate market is one of the most attractive and reliable markets in the world, with AED151 billion ($41 billion) invested by 217 nationalities in the sector between January 2016 and June 2017.

That market attracts investors from all over the world, due to its economic and political stability, in addition to developers’ attempts to undertake affordable housing projects.

According to Dubai Land Department, between January 2016 and the end of June 2017, UAE nationals ranked first in the list of investors in Dubai’s property market. A recent research found that Emiratis made about 12,000 investment transactions worth AED37.4 billion, while Indian, Pakistani, Saudi Arabian and British investors ranked second, third, fourth and fifth respectively, in order of number of registered transactions.

“This list has been unveiled at a time, when our real estate market is preparing for a new phase of growth in the run-up to Expo 2020. We are pleased to have witnessed such a high level of interest from global citizens in Dubai, who have invested over AED 151 billion across 71,000 real estate transactions in just 18 months,” said Sultan Butti bin Mejren, Director General of Dubai Land Department

The statement released by Dubai Land Department said that Indian investors made 10,628 transactions worth more than AED20.4 billion, while Pakistani nationals made 5,398 real estate transactions worth approximately AED7 billion.

Read: Is the Dubai property market really looking up?

It added that Saudi Arabians led the Gulf nations with 5,366 transactions worth AED12.5 billion and UK citizens took poll position among the European nationalities with 4,188 transactions worth AED9 billion.

Besides investors from Saudi Arabia, citizens from three other Arab countries appeared on the list, with investors from Egypt, China, Jordan, Lebanon and America coming in sixth to tenth places respectively, through 2,439 transactions worth over AED4 billion, according to the statement.

Egyptians also came in sixth place, followed by Jordanians who made 2,235 transactions worth AED4.2 billion.

Chinese investors ranked in eighth place, after concluding 2,177 transactions worth AED3.1 billion, while Lebanese nationals came in ninth place with 1,313 transactions worth AED2.6 billion and Americans ranked tenth with 1,119 transactions worth about AED2.9 billion.

Bin Mejren said that 217 nationalities had invested a total of AED151 billion in Dubai’s real estate market. “This demonstrates the confidence that the world has in our real estate environment, which is characterised by a strong regulatory system that provides safety and security for all parties,” he said.

Read: Faith and facts: You need both to buy UAE property

Why is Dubai attractive for property investment?

First, Dubai does not impose any direct income, corporate or property taxes.

Residents in Dubai pay no income, capital gain or inheritance taxes. With no property taxes applied to residential real estate in Dubai, rental income and capital gains on real estate transactions are free of any form of taxation.

According to a guide about buying property in Dubai, released by Knight Frank, the Dubai law currently places no restrictions on the number of properties that a foreign national can own and there are no tax implications in Dubai itself on real property ownership.

Second, local rental yields are some of the highest yields in the world, according to Property Finder Group. The group says that rental yield per square foot reached 9 percent in March 2017 in some areas in Dubai, such as Discovery Gardens and Jumeirah Village Triangle.

Another factor that makes Dubai an attractive place for investment is the upcoming Expo 2020, which will prompt firms from around the globe to consider expansion and relocation plans into the region, according to High Mark Real Estate.

“The hope is that this brings growth in commerce and employment opportunities, thus a population flux, which will, in turn, lead to an increase in demand for residential property and stability in pricing,” it says.

Read: Revealed: This is where UAE investors are buying property