Advantages of Real Estate Investment in Dubai in 2022

 

 

 

 

Dubai is the most attractive city in the UAE. Most of its population are immigrants. Not all foreigners consider it as a place to move to a permanent place of residence. Many people choose property for sale in Dubai Marina the UAE and other popular communities in the emirate as an investment. Let’s consider why it is worth investing in Dubai's housing stock.

Loyal Visa Policy of the Authorities to Real Estate Owners

The state welcomes investments in the economy by foreigners. For foreign real estate buyers, a simplified procedure of obtaining a residence visa is available: this kind of visa allows you to stay in the UAE during its validity period. Currently, property owners can apply for two visa types:

• 3-year visa, when purchasing a property worth more than $204,000;

• 10-year visa, when purchasing a property worth $547,000.

The 10-year visa is available since 2022, as previously the investment threshold was 5 times higher. At the same time, foreigners can buy not one, but several properties the total price of which exceeds the amount established by law. It is allowed to purchase an under-construction real estate, not just completed property. Payment can be made in cash or by mortgage lending. It is important to keep in mind that these visas allow you to live in the country, but not work. A working residence permit can be obtained on other terms.

Possible Mortgage for Purchasing Property in Dubai for Foreigners

Foreigners can apply for a mortgage loan along with local citizens. The only requirement is confirmation of solvency and compliance with the age limits established by specific banks. Typically, a mortgage loan is issued for a period of 10 to 20 years, so the retired persons can be denied by banks.
Solvency (paying capabililty) is confirmed by a bank account statement. The average loan rate is about 4% per annum, it can be lower or higher, at the discretion of a particular credit institution. The amount is also determined by the bank. This is usually no more than 50% of the total cost of the property being purchased.

The Possibility of Buying Real Estate in Installments

Foreign buyers have an opportunity to save on paying a commission fee to the bank. Developers seek to attract potential buyers to purchase an off-plan property. This allows you to invest in real estate in the most profitable way. The usual payment arrangement is:

• Down payment, ranging 10 to 30% of the property’s price;

• Regular payments made in accordance with the established schedule;

• Possibility of paying a part of the amount at the moment of the property delivery.

A number of developers give interest-free installments on real estate even after the construction is completed. Given that the real estate price at the initial stages of sales is several dozens percents lower than at the time the residential community is put into operation, the profitability of such investments is obvious.

Lack of Real Estate Taxes

The UAE has an attractive tax system. There is no personal income tax. It is possible to rent a property out and make a net profit legally. The right to own real estate is not taxed. The buyer pays only a fee at the time of the transaction. This is 4% of the property price, paid to the Land Department. In the future, when reselling, donating, inheriting, taxes are not paid by the property owner.

You can also save on this fee if you choose under-construction real estate unit. Some developers, in order to attract buyers, pay some part of the fee or even the total fee amount by themselves. The practice is quite common, but not mandatory for under-construction facilities.

Dynamic Real Estate Market

The main advantage of the Dubai real estate market is a wide range of properties. There you can find both low-budget apartments and premium residences. Prices range from several hundred thousand dollars to several tens of millions, which allows you to choose the best option for any budget. Foreign investors often choose 1- or 2-bedroom apartments, which are in high demand among tenants. During the last year, the demand for spacious villas and houses has been actively growing. The most demanded apartments are waterfront apartments. In terms of investment, they have the highest return on investment. Due to the limited space for development, the cost of waterfront real estate is steadily growing. In 2022, for example, the price increase more than 20% for a number of properties in prestigious upmarket areas.

High Property Profitability

Real estate prices in Dubai are growing consistently for the 3rd year. Capitalization of the price allows you to save your capital from inflation. Real estate features a high return on revenue. It varies from 5 to 7%. The more sought-after the area, the higher the profit. The three most popular areas are Palm Jumeirah, with the highest prices for the villa renting, Dubai Marina, and Downtown Dubai. At the same time, to make some profit, it is not necessary to stay in the UAE. Discretionary investment management is becoming a increasingly popular. In this case, local management companies or developers choose tenants and keep an eye on the property. Intermediary services for renting a property out cost 20% of the income you receive. Details about the most favorable real estate offers for moving to permanent residence or as investments can be obtained on the official website Emirates Estate.