Why to Invest in Dubai Real Estate (2021)

The United Arab Emirates is one of the most progressive and most comfortable countries for life, both economically and in everyday life. Investments from all over the world flow into the country's economy, in particular in the real estate sector in Dubai. There is no wonder about this. By buying real estate in Dubai you not only get housing where you can relax with the whole family, but also a valuable asset with great potential for doing business.

Reasons to invest in Dubai real estate during this coronavirus crisis

About 21 500 housing units were put up for sale in Dubai between January and September, bringing the total housing stock to 571 500 units. A further 10 500 units are expected to be commissioned in the last quarter.

Despite clear quarterly growth in property sales in the third quarter, the Dubai property market is likely to see further price declines in both rental and sales. The increase in sales activity by 50% compared to the previous quarter was mainly due to the deferred demand from the second quarter, as well as promotions from developers who were trying to get rid of the accumulated unsold properties. Total transaction volume decreased by 21.7% compared to the third quarter of 2019.

The behavior and preferences of home buyers have changed as a result of the pandemic and the subsequent isolation. The demand for townhouses and villa style property has skyrocketed. Homeowners are willing to trade in great views for outdoor spaces in the form of courtyards and terraces, which has led to a significant increase in requests for villas compared to 2019.

Expo 2020

Due to the global pandemic, new dates for Expo 2020 have been approved. The event will run from 1 October 2021 to 31 March 2022.

The World Expo 2020 will be held in Dubai, the capital of the UAE. Up to 25 million people will be able to visit the exposition for 173 days of work. This is an unprecedented world show that unites the cultures of peoples into a single civilization of “Humanity”.

Dubai gained 116 votes and confidently bypassed the rest of the contenders influenced by the “space” landscapes of the city and no less fantastic budgets of the project. The region will host an event of this scale for the first time.

Infrastructure construction is carried out on an area of 438 hectares in Jebel Ali Marina area to the south-west of the metropolis. Space zoning is clearly visible on the map.

The central part is a covered Al-Wasl square, which resembles a traditional Arab market. It is surrounded by three main complex pavilions.

Tax Free Nation

The social policy of the Emirates is based on the fact that the state refuses the main types of individual and corporate taxation and regulates prices for large groups of goods in order to avoid price increases due to increased incomes of the population.

In the UAE, income tax and value added tax are zero, and corporate tax rates range from zero to 55% depending on income. In practice, non-zero rates apply only to foreign banks and oil companies. Combined with small taxes levied on rent payments, the tax burden on business in the Emirates is about 15.9% of profits (if you exclude banks and oil companies, it is much less).

If you buy a Property in Dubai will you get a visa?

Yes, indeed, one of the advantages of buying apartment in Dubai is the issuance of a resident visa to the owner of a house worth over 1 million UAE dirham. Property owners worth over AED 1 million will be able to obtain a six-month visa. In addition, an applicant for a resident visa must also provide income data of at least 10 000 UAE dirhams (approximately US $ 2 700) per month.

Since 1 August 2014, the cost of visas themselves for residence in the UAE for a period of up to six months has significantly decreased for houseowners by almost half, namely by 45%. Now, owners of real estate worth over AED 1 million will be able to obtain a six-month visa by paying a fee of not US $ 571 as before but only US $ 314. However, related visa processing services are more expensive - about AED 13 000. If the investor sponsors dependents, there is an additional fee of AED 3 000 for each dependent. The conditions for issuing such a visa have remained the same: a resident visa is issued to the owner of the house and their dependents (that is, family members) for six months or two years with the right to renew. The registration procedure takes place at the Dubai Land Department.

Emerging trends

• According to Property Monitor, only at the beginning of this year, developers are ready to offer the Dubai real estate market about 50 000 new residential properties, mostly apartments. However, focusing on the data of previous years, it is possible to predict the implementation of this plan by 60-70%.

• Taking into account the above statistics on the delivery of new residential areas, we should expect a decrease in rents in 2020. And taking into account the volume of construction, and even looking ahead a year - in 2021, a decrease in rent is also predicted.

• For a long time Dubai has such very low mortgage interest rates. Therefore, it would be shortsighted to expect them to fall even more. However, in addition to the actual loan rates, there are other instruments, banks can operate in the fight for a client. And now other instruments will begin to change in the direction of relaxation. These include the included fee, age limit, and the like.

• Dubai property market trend is tipping the scales on rentals. The dynamic index of real estate values for 42 residential communities in the city proves the most popular properties for the city dwellers. November last year is considered an effective sales month over the past decade - 55.4% higher than the monthly average.