Dubai is a top destination for wealthy businessmen from all over the world. The aims of people coming there are purely individual while the reasons are quite obvious and reliable. For the last couple of years, Dubai has been attracting citizens of other countries thanks to its strong economy, convenient immigration programs, and opportunities to make money on real estate. One of the most popular directions of foreign funds in the UAE is investment apartments in Downtown Dubai. Let`s find out why purchasing real estate in Dubai is a wise decision for a successful future.
Features of Dubai as an advantageous investment option
1. Dubai's economy is the second largest in the region
Last year, the UAE accounted for 10.2 percent of the financial wealth of the Middle East and Africa, a share that will only increase, according to Boston Consulting Group forecasts. By 2026, the UAE's financial wealth should grow to $1 trillion.
In mid-2022, Dubai's economic growth rate reached its highest level since the summer of 2019, indicating a successful recovery from the pandemic, according to Standard & Poor's report.
2. Welcoming talented people from all over the world
More than 80% of Dubai's population is expats. Entrepreneurs, artists, students, and skilled workers from all over the world come to Dubai thanks to a large number of visas and emigration programs.
To encourage the business activity of foreigners, free zones with special tax and economic regimes have been created.
Also, Dubai is a point of attraction for millionaires, the number of which in the city is growing steadily. Because of this by 2030, Dubai will enter the top 20 richest cities in the world, according to the analysts of Henley & Partners. So far, as of 2022, there are 67,900 millionaires and 13 billionaires in Dubai.
3. Low possibility of stagnancy
Swiss financial holding company UBS called the probability of a bubble in the Dubai real estate market one of the lowest in the world. The Dubai market is rated fairly due to rising incomes, rising oil prices, and the rapid payback of real estate when renting it out.
4. Stable currency
The UAE dirham has been pegged to the dollar since 1978 at the rate of $1 = 3.67 AED. The absence of currency fluctuations protects the UAE economy from price hikes and capital flight.
Ways of making money by buying real estate in Dubai
Roughly speaking there are two ways of building capital via investing in Downtown Dubai real estate.
1. Buying a property to renting it out for a short or a long term
2. Buying off-plan property with an aims to resell it at a higher price
Profitability of apartments in Dubai from short-term and long-term rentals
Investors often choose hotel units for short-term rentals in Dubai. The convenience of buying a room in a hotel is that the owner will not need to search for tenants, check them in and monitor the condition of the property. The hotel takes care of the whole rental business: from marketing to cleaning and handing over the keys. The profitability of such properties is 6-12% per year.
Another popular option is to rent an apartment in Dubai on a long-term basis. Since more than 80% of the population of Dubai are immigrants from other countries, it is not difficult to find a tenant in the apartment. The profitability of the apartment when renting on a long-term basis is 4-6%.
Buying off-plan and resale income
Property prices in Dubai are rising rapidly, so many people buy property under construction to sell it later at the commissioning stage and earn on the difference in value. In this case, the investor should understand that he takes certain risks - there is always a possibility that the market will stop or start to fall.
Real estate agency with a number of housing options
Being interested in Downtown Dubai real estate, it is advisable to conduct a thorough examination of the options available. To receive professional help, contact the agents from Ax Capital. They are able to select the most appropriate housing unit in the perfect location as well as consult a buyer about any details of the deal.
