Why invest in Dubai's real estate market in 2024

Undoubtedly, Dubai is a global hotspot for real estate investment. Every passing year makes it even more attractive for investors seeking lucrative and secure investments. If you are a first-time investor or someone planning to increase your real estate portfolio and wondering if 2024 is still the best time for investment, then this blog is for you. So, let's uncover why 2024 is a better time to invest in Dubai's real estate market with the help of key trends and factors shaping the market.

High Rental Yields

Approximately 80% of the city's population comprises expatriates, and 17 million tourists visit Dubai annually. Therefore, Dubai's real estate market offers some of the world's highest rental yields because of the strong demand for rental properties, with some areas yielding up to an impressive 10% per annum. The table below illustrates the average rental yield for different types of properties in Dubai:

The Dubai government has worked hard to make real estate a safe and attractive investment. They have set up clear laws that balance the rights of both tenants and landlords. These laws assure investors that their investments are safeguarded within the framework of a comprehensive legal system.

Tax-free Income

Dubai's real estate market is very attractive because of its favourable tax policies. Expats from around the world have always been drawn to Dubai for its tax-free lifestyle. Think about it. How many countries don't levy any tax against your income? Not many. Dubai does not levy income tax on real estate rental income, allowing investors to keep more rental profits. Additionally, there is no capital gains tax, so investors don't pay taxes on the profits when they sell their properties. The favourable tax environment makes investing in Dubai real estate even more profitable.

Economic Growth and Stability

Investors choose Dubai because of the economy's continued growth and stability. As the tourism and commercial hub of the Middle East, it has one of the most diversified economies, attracting a high volume of foreign investment annually. IMF expects the UAE economy to grow by 4% in 2024, and Dubai will play an important role in that growth.

Dubai recently took the top spot for attracting foreign direct investment projects. For three consecutive years, it has been ranked the number one city worldwide for attracting greenfield foreign direct investment (FDI) projects. Greenfield FDI means a parent company starts a subsidiary company in another country, where it builds everything from scratch.

Dubai surpassed London and Singapore in achieving this top position. Last year, Dubai attracted 1,070 greenfield FDI projects, 142% more than runner-up Singapore (442) and 148% more than the British capital London (431). Dubai aims to attract AED 650 billion in FDI in the next decade, which will double the size of its economy.

Real Estate Market Growth

In the first quarter of 2024, residential property prices in Dubai continued to rise rapidly. On average, prices increased by 20.7% compared to the same period last year, slightly higher than the 20.3% growth seen in February 2024. Specifically, apartment prices rose by 20.4%, while villa prices increased by 22.1%.

Dubai's residential real estate market saw the highest number of transactions recorded in the first quarter of 2024, totalling 35,310. This represents a 20.5% increase compared to the previous year. During this period, purchases of off-plan properties rose by 23.9%, while transactions in the secondary market increased by 15.2%.

Dubai's real estate market is booming, with many new villas, townhouses, and apartments expected to be finished and handed over to buyers this year. Even with so many new properties, prices for renting and buying homes will keep increasing because of the huge demand.

Attractive Financing Options

Dubai's banks offer great deals for people willing to buy property. They have low interest rates on mortgages and flexible payment plans, which helps investors make more money from their investments. The government has also made laws to protect people who take out mortgages to make buyers feel safer. Investors can choose between different types of mortgages, like fixed-rate mortgages, variable or adjustable interest rates, or discounted-rate mortgages, to fit their investment plans. These options help keep Dubai's property market lively, letting investors act quickly and take advantage of new opportunities. Some of the popular banks in Dubai providing mortgages are:

Other Reasons to Invest in Dubai's Real Estate Market

Some of the other reasons to invest in Dubai's real estate market include:

High Standard of Living

Any list of the world's most luxurious cities includes Dubai. The city has a reputation for a glitz and glam lifestyle that is unlike anything else in the world. The city isn't all about lavishness, though. It's a lifestyle destination that redefines luxury with everything you can ask for.

World-class Infrastructure

Dubai's world-class infrastructure and connectivity have helped it become a major hub not only in the Middle East but worldwide. In addition to world-class infrastructure and urban planning, the city is also evolving into a smart and sustainable city.

Dubai is Safe

Dubai is one of the best places to live and raise a family due to its safe and secure surroundings. The crime rate is really low, and violent crimes are almost nonexistent. In fact, Dubai is considered to be one of the safest cities in the world.

Dubai has Great Weather

Dubai is famous for its sunshine and experiences four distinct seasons throughout the year.

Winter (Dec-Feb):

• Temperature ranges from 14°C to 24°C (57°F to 75°F).
• Relatively cool temperatures compared to other seasons.

Spring (Mar-April):

• Temperature ranges from 18°C to 34°C (64°F to 93°F).
• Gradual warming up from cooler winter temperatures.

Summer (May-Aug):

• Temperature ranges from 30°C to 45°C (86°F to 113°F).
• Extremely hot temperatures characterise the summer months.

Autumn (Sep-Nov):

• Temperature ranges from 25°C to 38°C (77°F to 100°F).
• Gradual cooling down from the peak summer heat.

While people from Europe and other parts of the world generally enjoy Dubai's winter weather, the extreme summer heat and high humidity can be challenging for some.

Conclusion

By investing in Dubai real estate in 2024, you can join successful investors who have benefited from the city's strong property market and enjoy owning property in one of the world's top destinations. However, like any investment, investing in real estate has risks. Understanding the market, knowing the potential risks, staying updated on trends, and doing thorough research will help you avoid those risks.