“The Arabian tale”: is it profitable to invest in Dubai apartments?

Overseas real estate experts reveal the secrets of beneficial investment strategies in Dubai in 2024. What is profitable in the market, what methods are working, and what do investors need to pay attention to first? Let’s discuss whether it is worth following today’s trend and focusing on investment flats with a sea view in Dubai in the “Arabian Tale.”

Are foreigners willing to invest in the UAE real estate?

According to the Dubai Land Department (DLD), the number of transactions in this emirate in 2023 increased by 49% compared to last year. And the value of deals grows by 62%.

Experts advise not to limit yourself to Dubai. Abu Dhabi, the capital of the United Arab Emirates, is a promising city appreciated by European investors actively acquiring local real estate.

Why is the UAE attractive for investment?

The United Arab Emirates is one of the safest destinations: the country has a neutral policy and is friendly to foreigners. The economy has recovered quickly after the pandemic, and global companies are increasingly registering in the UAE. They are attracted by:

• A strong business community,
• Legal transparency,
• The absence of suffocating taxes.

In the next 30 years, the government plans to take the world’s leading IT and financial sector positions and attract qualified expat specialists. This means that rental demand will continue to grow — increased by 25% since the beginning of 2023.

According to the Swiss bank UBS, which evaluates the indices of “bubbles” in the global real estate market (UBS Global Real Estate Bubble Index), in 2023, the Dubai market is in the green zone: it continues to thrive. Fitch’s credit rating defines the UAE as an “AA-” country with above-average reliability, second only to the United States.

The UAE’s policy is aimed at attracting overseas investment. The country is the guarantor: the escrow accounts belong to it, and the owner is provided anonymity and investment residency. So, investors are having a better time than ever.

What is the “entry threshold” for foreign investments?

The minimum cost of liquid residences is AED 480,000 for a studio near the sea and about AED 800,000 for a 1-bedroom apartment. However, the “entry threshold” is lower than the cost of the properties. You can invest from AED 200,000 thanks to a flexible instalment plan. Agents can select the best options in a dynamic and highly competitive market, as available offers can disappear in hours.

What annual profit can you expect?

Some customers can receive an income of 42%, and there have also been cases when the yield reached 100% annually. It is hard to believe, but it depends on the strategy agents can help you decide. You must understand whether you want to receive passive income regularly or quickly multiply your capital.

One of the standard options is to buy lucrative apartments, rent them out, and resell them at the highest price. It does not matter if it belongs to the primary or secondary market; the main thing is that the building is new. The yield of such a strategy for 1.5-2 years ranges from 14-20% per annum; for example, the average cost per square meter has increased by 14.5% since the beginning of this year. A broker will help you feel the moment to sell.

What features of housing should you pay attention to?

Real estate in the UAE has:

• A high level of comfort and technology,
• Complex engineering solutions,
• Expensive materials, etc.

Projects are usually implemented for about three years. All apartments are put up for sale with:

• Modern furniture,
• Household appliances,
• Branded plumbing and other amenities.

You can move into your residence immediately or rent it out. However, due to climatic features, buildings are prone to high wear and tear: they lose their appearance earlier than we are used to. Therefore, keeping your property long makes no sense if your goal is reselling.

What are the features of investing in the UAE?

The investor does not need to pay the total price at once: You can become your property owner after making the first payment and registering the transaction with the Dubai Land Department. Developers provide flexible instalments for the construction period and allow the owner to pay after he starts earning income.

You can dispose of your property and sell it after paying 30-40% of the value. Developers make reselling an off-plan housing unit impossible by resisting speculative purchasing strategies that can overheat the market.

The agreement is drawn up only in Arabic and English. It would be best to turn to experts to evaluate the contract, not to sign it unthinkingly: some items may negatively affect your income. A typical mistake is that you may incorrectly determine the deadline for issuing keys and calculate income. Remember that if you do not follow your payment schedule, the transaction will be cancelled, and you will lose all invested money and your property. You should have a reserved amount for 2-3 payments in advance.

Can investors live in the UAE?

Yes, they can. They can get a 2-year visa for investments of AED 750,000. It is impossible to resell the property during this period. Otherwise, it will be cancelled. Moreover, investors can get a 10-year visa when buying properties from AED 2 million. This is a more profitable and reliable option in the long run.

What to buy — new apartments or secondary real estate?

Any transactions are transparent and can be made remotely. There are several reliable currency calculation options.

Many people think that residences on the primary market are preferable, and they are bought up first. However, the demand for new buildings and secondary real estate over the past year has changed. This is due to the influx of expats: they move to the country with their families and prefer residential apartments in the most popular areas.

There were cases when apartments from the owner were cheaper in a residential complex than housing lots from a developer. So, if you want to buy as profitably as possible, you should work with an experienced broker who can navigate the situation.

Do you want to purchase a property in the UAE?

If you want to invest, decide right now: time is playing against you. The Dubai market is relatively easy to enter — it is friendly. But if you take a step and change your mind, you will not be able to leave the market without losses. Emirates.Estate brokers will be in touch with you 24/7 and ready to choose the most investment-attractive strategy for you.

 They withstand fierce competition among overseas real estate agencies, are the first to learn about the most delicious options, and offer reliable investment options at Emirates.Estate. Despite some sceptical opinions, the demand for real estate in the Persian Gulf continues unabated. However, the time when any investment brought results has passed. Nowadays, you need to think carefully about your actions to make money. A competent specialist is 90% your guarantee of success.