Invest in property in Dubai
Buying property in Dubai is a crucial way to create wealth and generate income. However, all investments carry risk. Therefore, there are many factors to consider before investing in Dubai’s real estate market to ensure you get great returns.
4 reasons to invest in Dubai
- Dubai offers higher rental yields than many other mature real estate markets. On average, investors can achieve gross rental yields up to 9%.
- Property prices per square foot are lower than many other cities globally, making Dubai an affordable location to own prime real estate.
- New visa laws linked to property investment enable investors to gain a residence visa subject to certain conditions. For properties valued above AED 1 million, you may be entitled to a 2-year residency visa. For properties valued above AED 5 million, you may be entitled to a 5-year residency visa. While for properties valued at above AED 10 million, you may be entitled to a 10-year residency visa.
- Highly favourable tax conditions in particular,the absence of property taxes and stamp duties, that are applicable in other global real estate markets, also paints the city as a very attractive investment environment.
- Facilities and amenities available, including proximity to transport, education, etc.
- Market conditions and timing of purchase
- Interest rates
- Maintenance costs
- Apartments typically provide stronger rental yields than townhouses and villas due to Dubai’s low to mid-income population.
- Choose studio and 1-bedroom apartments in affordable communities with established infrastructure, close to transport and essential amenities such as education.
- Resale of smaller units is faster and offers a better value compared to larger sized properties.
- Investors get a price advantage with under-construction properties priced remarkably less.
- There is a high probability of the property increasing in value near to completion and handover.
- Initial down-payments of 5-10%, as opposed to 25% with ready properties, may make purchase more achievable.
- Developers offer highly attractive, flexible payment plans, in some cases offering post-handover 2-5 year payment plans.
- Downward movement in prices may result in the property being valued at less than the initial purchase price.
- Projects maybe cancelled, or completed after their scheduled date. Therefore, conduct independent research on the developer to verify their track record and reputation.
- You may buy a property at a significant discount, when new supply enters the market causing prices to dip.
- Ready property is often located in areas with completed infrastructure in place.
- Get rental income from the moment a tenant is found.
- Receive the added benefit of proven rental yields, when you buy ready property.
- The minimum deposit required for expats is 25% of the purchase price for properties valued at less than AED 5 million, and 20% for nationals.
- Expect upfront transaction costs at approximately 7-8% of the purchase price.
- You need to consider the turnaround time of your chosen bank, if you obtain a mortgage.
7 important things to consider when selecting an investment property
High return on investment (ROI) is the most important goal when investing in property. Securing a property which delivers strong rates of return requires proper due diligence from the outset. Below are 7 factors that might influence ROI:
Recommended areas to invest for high ROI
During the last years Dubai Silicon Oasis offered the best gross returns for apartments. New communities, Meydan and DAMAC Hills closely followed behind.
For villa and townhouse communities, Town Square yielded the highest gross returns, followed by The Springs, Reem – Mira and Mudon.
3 tips to get high returns
Pros and Cons of Off-plan property and ready property
Investing in off-plan property or ready property in the secondary market both have advantages and disadvantages. Each individual’s financial background and risk appetite is different. Therefore, it is important to adequately assess the risks associated with both.
Advantages of buying off-plan
Disadvantages of buying off-plan
Advantages of buying ready property
Disadvantages of buying ready property
Take now your chance to invest in Dubai! Consistent new supply offers you a variety of choice and continues to drive prices down to more affordable levels.