Dubai property is considered affordable compared to other global hubs like Singapore and Hong Kong. The UAE’s zero-tax regime for buying residential properties is also particularly attractive for high-net-worth investors at a time when wealth taxes are on the increase in many countries. The Middle East property market is thriving, no more so than in the UAE, where the luxury residential market has seen ongoing growth.
Knight Frank’s wealth report says that “the global ultra-high net worth individual population is forecast to rise by 22 percent over the next five years. Which means an extra 43,000 people will be worth more than $30 million by 2023.
Federal legislation was cleared for the first five-to-10 year residency visas for investors, entrepreneurs, and scientists. That should attract more up-market house buyers. Experts say that buying a home in Dubai can save you money. And here are some of the reasons why:
- Current Real Estate Market Trend
Dubai is currently a buyer’s market. With competitive inventories from Dubai’s top developers, a buyer has much more options to choose from this market. JLL estimates that average residential prices in Dubai have dropped by roughly a quarter of its value since its peak in 2014. Flexible payment plans, affordable pricing, luxurious and quality products make developers like Vincitore Real Estate unique in this market.
- Rent or Buy?
Does this fall in price means it’s cheaper to buy a property in Dubai? Experts say buying usually makes financial sense for anyone who intends to remain in Dubai for seven years or more. If you are planning to stay in Dubai for a long period then there is no doubt. Especially in this market situation, it is cheaper to buy than rent, even taking into consideration all the fees and costs involved.
3. About the Math
Math in the sense of prices will be different for each. It tends to change person to person. And it depends not only on the price of the property and the length of time you stay but also your current rent, the size of your down payment, the term of the property finance and interest rates. The market has not yet bottomed out but is softening and heading towards the trough, for this reason, buyers use this opportunity to pick well-located properties and negotiate the price downwards in their favor.
4. High Return on Investment
The latest studies confirmed Dubai’s status as the best in the world for real estate investments. The rental income in Dubai more than doubled when compared to other major cities of the world, such as London, Paris and New York, according to industry analysts. Arjan topped Average Rental Yields of Dubai Properties list with 12.4% gross returns. While investor’s favorite International City improved to 10.1% from an already high 9.2% due to healthy demand from those migrating from other emirates.
- Low Mortgage Interest Rate
Record low finance rates around the world also make it cheaper to buy at the moment. In April, the US Federal Reserve decided to hold rates steady suggesting the current unprecedented low rate environment is likely to remain for some time to come. In UAE the interest rate for the mortgage is very low and is fall in between 3-4%.
- Latest Visa Rules
New UAE visa rules are also expected to boost demand for Dubai homes, pushing up prices and rents in the long term. Last year, the UAE government approved a series of measures aimed at stimulating the economy and encouraging long-term investment.
This included enabling expats over 55 to secure five-year retirement visas if they own property worth at least Dh2 million or have Dh1 million in savings or an active income of more than Dh20,000 a month. The new rules also allow key workers such as doctors and engineers access to long term visas.
- Expo 2020
With a little more than a year left until Expo 2020 Dubai, industry experts say they are now finding a spate of high demand for Dubai’s real estate sector. Expo 2020 is expected to attract 25 million visitors, of which 70 percent will be from outside the UAE.
According to our financial analyst: “When you rent, you are paying someone else, and you might have to move out one day of that property. But when you buy a house, in 20 years, even if the price goes down to zero, you still have a home. But as a tenant, after those 20 years, you have nothing.”