Dubai, Asia’s vibrant economic capital, continues to captivate the world with its soaring skyline and evolving real estate landscape. Its strategic location as a gateway to 2.5 billion consumers across the Middle East, Indian subcontinent and East Africa and its status as the world’s top city in terms of tourist spending ($30.81 billion) make it an international destination. The attractiveness of investment has been amplified.
However, establishing a successful real estate investment portfolio in Dubai requires strategic foresight. Understanding real estate trends, legal frameworks, and cultural nuances is essential for profitable investing.As we dig deeper, we unravel these layers and see how Indian investors can dubai real estate Journey.
Why do Indians invest in real estate in Dubai?
Indian investors are becoming increasingly prominent in Dubai’s real estate market. With approximately 1,700 weekly flights between Dubai and India and an annual influx of 1.3 million Indian tourists, the relationship between Dubai and India has greatly strengthened over the years. Indians are at the forefront of property ownership in Dubai, investing a staggering Dh83.62 billion between 2015 and 2021, according to Dubai Land Department (DLD). The UAE is also a preferred investment destination for Indian companies, and conversely, it is also a leading investment country for India. As for FDI.
Its appeal lies not just in its geographical proximity and economic connections, but also in the high returns that real estate in Dubai promises. According to an article in ANI News, the average return on investment in Dubai’s real estate market is 7%, significantly higher than global metropolises such as New York (2.8%), Singapore (2.5%), London (2.6%) and Hong Kong. It has become expensive. (2.3%). Dubai’s stable political and economic situation, coupled with new laws allowing full ownership of foreign companies and repatriation of capital, is further encouraging Indian investors.
How to start investing in Dubai
Dubai’s real estate industry is booming and offers many opportunities for Indian investors. Here are five simple ways Indians can take advantage of this potential expansion.
1.Unplanned property
The affordable pricing of off-plan properties in Dubai is a big draw for investors. Investing in off-the-plan homes, which are priced much lower than pre-built properties, gives investors the chance to profit from the potential for the property to increase in value as it nears completion and handover. This development potential is supported by all the positive indicators that Dubai’s real estate market is currently showing.
If you’re buying a property under construction, you can also benefit from flexible financing options with down payments as low as 10%. Some smart builders in Dubai offer payments spread over two to five years after handing over the property. This allows you to rent your home before you start making payments.
Indian investors in residential real estate in Dubai have nearly doubled since 2021, suggesting growing interest in Dubai’s real estate industry. Rent prices in Dubai will increase by an average of 16.9% in 2023, presenting an attractive outlook.
“Check out reliable developers and RERA-registered builders to protect your investment.”
2. Ready properties:
Investing in a ready-to-move-in apartment in Dubai is a safe bet. With a finished property, the apartment has already been built so you know exactly what you’re getting. You can also check the layout and finish quality before purchasing. Another benefit of buying a home that’s already on the market is that you can start collecting rent right away. Once the acquisition is complete, you can put the house up for rent and the tenant can move in within a few days. Your investment will pay off quickly.
For individuals entering the Dubai market for the first time, ready-built homes are a safer option for most buy-to-let investors. They have great rental income potential and are less susceptible to market changes. Approximately 12,000 new homes will be delivered in Dubai in the first half of 2023, giving buyers several options. His 7.1% rental yield in Dubai is among the highest in the world, despite its wealth of real estate.
“Regardless of the type of property, due diligence is essential for a safe and profitable purchase.”
3. Joint venture:
Given the versatility this mechanism offers, it is clear that joint ventures are currently one of the most desired options around the world. The establishment and operation of joint ventures in the UAE is governed by the Companies Law, as amended by the UAE Commercial Companies Law (Federal Law No. 2 of 2015). Joint venture real estate transactions are becoming more common in the UAE. For example, a joint venture proposal from an experienced real estate developer can be reassuring and attractive to land parcel owners who lack expertise, aptitude, or experience in real estate construction or development. There is a gender.
Joint venture goals and objectives will fail if the parties involved in the transaction do not clarify their respective responsibilities, if the agreement between the parties is not clear and unambiguous, or if the type of joint venture vehicle chosen is wrong. More likely. India’s joint venture investments in Dubai peaked in 2023. The National News reported that Dubai is expected to see average house prices rise by 5% to 7% in 2024.
4. REIT investment:
Investing in a REIT (Real Estate Investment Trust) allows you to enjoy some of the benefits of the UAE real estate market without the disadvantages that come with buying real estate. Companies that buy and hold real estate are known as real estate investment trusts (REITs). Another type of REIT is a mortgage REIT, which lends money to real estate investors. REITs can be bought and sold just like stocks in other companies. Rather than directly owning and managing real estate, investors own shares in investment businesses (including mortgage lenders) that directly own and manage real estate.
Two ways REITs make money are through dividends and price appreciation. They often provide investors with a stable source of income (distributing a large portion of their profits as dividends). The UAE ranks fourth in the world for annual real estate investment trust (REIT) dividend yields, ahead of industry giants such as the US, UK, Australia, Germany and Singapore, according to PWC research.
5. Property management services:
The purpose of property management is to relieve owners of the hassle and anxiety associated with maintaining their assets. As a neutral third party between landlords and tenants, property management companies oversee the upkeep of rental properties, collect rent payments, handle repairs and maintenance, and ensure tenants receive proper notice. Masu.
When looking for a property management company in Dubai, it is important to ensure that the company’s trade license and the services it provides are within the regulations. Another factor to consider when choosing property management services in Dubai is price. Pricing between 5 and 10 percent of rent is common for urban businesses. Companies must also provide the appropriate level of support and transparency so that owners can trust them.
Conclusion:
For Indian investors looking to diversify their holdings, Dubai’s real estate sector offers a huge opportunity. By choosing the right investment strategy and being aware of local laws, Indians can benefit from the continued expansion of Dubai’s real estate market and secure a bright financial future.
Suresh KP is the founder of Myinvestmentideas. He is a NISM Certified Investment Advisor and he is a NISM Certified Research Analyst. He has been analyzing financial markets for the past 20 years. He can be reached at suresh@myinvestmentideas.com.
