Dubai’s secondary property market is surging to new heights and its growth is expected to continue trending upward. Investors from Europe are flocking to this real estate hub to get a piece of the action. What makes Dubai’s secondary property market such a popular investment choice?
Today’s geopolitical economy has created a lot of uncertainty in the world. While this has driven a lot of markets down, we’re seeing Dubai’s market thrive. European entrepreneurs and families are being driven to Dubai due to its strong business and lifestyle hubs. This has, in turn, also attracted investors.
This surge in demand has led to a secondary real estate market in Dubai that has seen prices rise as much as 15% over a two month period.
Explaining Dubai’s Secondary Property Market
Real estate markets consist of two elements – a primary and secondary market. The primary market consists of new properties including development projects and new property launches.
The secondary real estate market is where most transactions occur. They are rentals, resales, property flipping, and all of those strategies that earn investors millions in returns.
Dubai’s secondary property market is one of the most lucrative in the world. Rentals get higher returns and property flipping can earn massive returns. We’re going to explore the reasons why this market is so lucrative.
Dubai’s Post-Pandemic Economy Recovered
The pandemic is the leading cause for the struggling global economy but Dubai’s market has recovered. This led to an increase of approximately 85% in the value of homes in Dubai. Dubai skyscrapers are an attractive investment for international entrepreneurs. They are luxurious so they have a high ROI in comparison to other parts of the world. This is mainly due to Dubai’s amazing recovery from COVID-19.
In fact, the UAE as a whole continues to outpace much of the western world as the top investment choice as we head deeper into 2023. Dubai’s leaders have been able to customize their strategies to meet the demands of the post-pandemic global economy.
Dubai’s Real Estate Market is Booming
Even during the pandemic during 2020, Dubai kept its place as one of the top three real estate investment locations in the world. In the 2020 Annual Transaction Report revealed by the Dubai Land Department, the area logged over 50,000 transactions.
Several factors make Dubai’s secondary property market such a profitable choice for investors so let’s explore those now.
Dubai Attracts Top Corporations
The UAE serves as a hub between Asia, Europe, and Africa. This makes it one of the top strategic positions in the world. As a result, corporations are attracted to this area. This boosts the job market and attracts residents to the area. The UAE government continues to add regulations that attract even more businesses in order to further strengthen its strategic geographical location. For instance, the UAE holds a number of advantageous international trade agreements with Europe and South Asia that are advantageous to businesses.
Dubai’s Free Trade Zones
Free Trade Zones in Dubai are extremely advantageous to residents and they attract a lot of workers to this area. It’s easier for businesses to find top level talent. This also strengthens Dubai’s secondary property market. Some of the advantages of free trade zones include:
- Income tax is exempt for individuals and corporations.
- Foreign nationals are allowed to own all stake in a company.
- 100% capital and profit repatriation is possible in free trade zones.
- Capital investments have no restrictions.
- Director information remains confidential.
Rentals Return High Yields
According to the Global Property Guide, Dubai’s rental market generates a 5.19% annual return on investments. This is quite high in the real estate sector when compared to other large cities like New York (2.9%) and London (2.7%). This value has shot up in the post-pandemic market too so investors can expect better returns in 2023. That’s why so many investors are jumping into the market before it cools off.
Property Prices are Lower
Dubai’s property prices are lower than other international locations when you compare the price per square inch. According to the guide listed above, the price per square meter for apartments is just over $5,000 in Dubai. It’s anywhere from 3 to 6 times more expensive in cities like Hong Kong and New York.
Additionally, homes in Dubai also tend to cost much less in comparison. So investors have a huge opportunity to get these properties while they are still cheap.
No Property Tax
Investors love Dubai because of its tax-friendly laws. Dubai properties have no taxes on purchase and when filing income tax. Countries like the UK, France, and the US all have tax rates as high as 2%. Property taxes in other international cities eat away at investment properties.
Gallup Law and Order Index ranked the UAE as the fourth safety country in the world. This attracts residents to the region and creates a demand for housing. As we know, demand causes prices to soar and creates stability in the market place. We see this global ranking remain steady, leading investors to huge opportunities for profit.
Friendly Visa Laws
Dubai welcomes everyone and has taken considerable steps to creating a path of residency. One such law is their property investment linked residency laws. In many cases, investing in Dubai property gives individuals a quick path to obtaining their residency visa. This is another appealing factor that attracts investors from all around the world.
Essential Role of Property Investment Firms
Property investment firms make it easy for investors to make money in Dubai’s secondary property market. Their role as facilitators is vital to investors navigating the challenges of foreign investing. Dubai’s real estate market is attractive but it’s also different from others around the world. New investors are highly encouraged to seek help when they buy property in Dubai.
The UAE takes compliance and ethics quite seriously, often attaching hefty fines to actions that defy either of those traits. The problem is that many new investors stumble into these issues by mistake. Avoid these problems by letting a knowledgeable Dubai property investment expert guide you on the journey.
Investment Opportunities are Bountiful in a Post-Pandemic Market
Individuals who invest in property in Dubai Marina or other popular destinations are finding themselves raking in huge returns. Even after all of the global disruptions we’ve seen in the last several years, Dubai’s property market continues to soar.
Investors who are looking to generate a long, stable income will find Dubai to be an attractive option. Dubai’s strong foundation and advantageous regulations make this a great place to put your money. But you better get started soon because this market is expected to soar in the coming years.