Who and why is investing in real estate in Dubai in 2022

Property in Dubai

Purchasing an apartment or a villa in one of the prestigious districts of Dubai is a dream of many people. Ax Capital is a real estate agency in Dubai the UAE that can help you acquire a property in the emirate. But who invest in a real estate there and why do they do that? Let us have a look at some research in the article.

Why purchase real estate in Dubai

According to experts, European buyers are becoming a key demographic driver of property sales in Dubai, with the majority of them being end-users, i.e. homebuyers for their own residence. Property Monitor attributed this to the relocation of entire families from Europe, citing a sharp increase in school attendance by new residents as additional evidence.

And it is no coincidence. The government has done a lot to date to make such a picture a reality. For example, a major new development was that the minimum financial requirement to apply for a three-year visa through investment in the city’s booming residential real estate market was recently lowered to AED 750,000 (USD 204,000) from AED 1 million (USD 273,000).

The visa regime available under the Taskeen DLD program allows an individual who owns AED 750,000 or more property in the UAE at the time of purchase to apply for a three-year renewable visa with the option of sponsoring a spouse. Real estate consultants said the move will give further impetus to Dubai’s property market, which is rapidly recovering and becoming more attractive to international investors after the region’s biggest event, the World Expo, which opened on 1 October 2021.

It is also worth noting that the efforts of the government to ease visa laws have not gone unnoticed in the world. According to the new Henley & Partners index, the city is one of the most attractive destinations in the world for wealthy people who want to obtain a residence permit abroad in exchange for equity residences investments.

International rankings

Dubai ranked 11th in the new ranking of the best cities to live by investment, which, in addition to it, includes 25 other leading cities in the world.

Henley & Partners reported that the emirate scored high due to tax-friendly treatment, as well as affordable investment options with a high standard of living. The city also ranked second for COVID safety.

As for the national composition of new foreign investors in the real estate of the emirate, the rates of local currencies all over the world played an important role here. According to a study by consulting firm Knight Frank, Egyptians have benefited the most from buying property in Dubai over the past few years when currency fluctuations are taken into account.

While  overall market is down 26.3% from its peak, house prices in the emirate rose 1% in the first quarter of 2022, the report said. This is the biggest quarterly increase since the summer of 2014, according to Reuters.

The surge in interest in the emirate’s real estate from overseas investors has also been fueled by factors such as the response to COVID-19 and its business-friendly approach, which has created bullish business sentiment, with investors returning in large numbers. They are looking to take advantage of both improving capital growth prospects and attractive rental yields that are still higher than most other established markets can offer.

The UAE government’s approach to attracting the best and brightest expats through remote visas, golden visas and business reforms has also had a positive impact, with low home loan interest rates and improved labor sentiment also boosting demand.

The top five nationalities that invested the most in the Dubai real estate market in the first half of the year were:

  1. Indians,
  2. British,
  3. Italians,
  4. Chinese
  5. and French.

However, the value of real estate over the past six years has varied depending on the currency in which it was paid for, with Egyptians and Pakistanis the biggest winners and Europeans and Jordanians the biggest losers.

“For example, Egyptian Pound homebuyers have seen an impressive 51.4% increase in their investment in Dubai housing lately, while Pakistani Rupee homebuyers are currently benefiting by more than 12%,” Faisal said. Durrani, Partner and Head of Middle East Research at Knight Frank. This study was conducted by the company to evaluate the value for homebuyers in different currencies compared to 2015.

“And if we go back in time to 2007, then one could say that Egyptian and Pakistani investments in the city’s housing have paid off by as much as 200%,” he added. “European buyers, meanwhile, saw a 20.5% increase in investment since 2007, while for UK buyers the increase was even higher at 68%. But the flip side of this story, of course, is the fact that those who until recently could not afford housing in Dubai are now in a much better position than they were in 2015.”

Real estate agency in Dubai

Now is the best time to invest in property in Dubai. Ax Capital agency’s specialists are ready to offer various options to every taste and budget.

Huynh Nguyen

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