Recent restrictions imposed because of the pandemic have affected business and had a negative impact on various sectors of the economy in many countries. The private property market in the United Arab Emirates was no exception. Now that the country is rapidly recovering from the temporary crisis caused thereby, the market has responded accordingly, and several grand projects, like Damac Cavalli Tower, are being currently underway.
In this article, we shall assess the current state of affairs in the real estate sector in Dubai, look at how the UAE government has tried to attract foreign direct investments, and review the most significant reasons why foreigners seem so keen on buying private property in this city.
Life in Dubai
Dubai has always had a reputation of being one of the wealthiest and enigmatic cities in the world. With its fantastic beaches, ultramodern architecture, numerous racecourses and ski resorts, and the largest shopping market in the Middle East, Dubai has by now become the fourth most visited city on the planet.
There are lots of things to do and places to see even within the city borders, and even more outside. Entertainment venues, cultural and historical sights, and vibrant nightlife keep the pace of life in Dubai at the highest level every day of the week. Besides that, shopping goes on round the clock, and there are almost one hundred shopping malls in the centre of the city alone.
At the same time, there are numerous little districts right in the centre of Dubai where you will hear no noise from the cars, and people live their slow and quiet traditional life, undistracted by the countless tourists and supersonic luxury sports cars just around the corner. The city has a low crime rate, high level of education and income and advanced medical care.
Most visitors come to Dubai either for holidays or on transit. Some choose to schedule their business meetings there. Yet, there has recently been a noticeable increase in the number of foreigners seeking to buy private property in Dubai.
Real Estate Market in Dubai
The country has always been an attractive target for foreign investments in its luxury private property. Top-class residential complexes offer exceptionally comfortable living conditions by all international standards. At the same time, the property construction market generously provides infinite options, from luxurious mansions to bare pieces of land for constructions of one’s design. It is even possible to buy off-land property in the most upmarket business districts of the city.
Then comes the pandemic. First, it brings tourism to a halt, and tourism still remains one of the biggest contributors to the UAE’s national economy, even though local people would probably not want to think of it that way. Second, it causes a noticeable turndown in the country’s real estate sector, very possibly for the same reason.
The government has to make a decision, and it comes up with the most ingenious one that kills two birds with one stone: revitalise the private property market and allow foreigners into the country.
Real Estate and Permanent Residence
As a foreigner, all you have to do is invest a minimum of one million dirhams in private property and in case you have taken a mortgage loan, repay at least half of it, and you are entitled to a private property owner visa, which is a residence permit, effectively. The number of years the visa will be valid depends on how much you have invested. And if you are at least 55, and you purchase property for a minimum of two million dirhams, you will be granted permanent residence.
Furthermore, it has become considerably easier to get a mortgage loan, and the latter has increased to 80% of the total purchase value. You may even apply for a mortgage loan before you find a property to buy. It is very convenient since it allows you to browse the market with the money already available.
Real Estate Statistics for 2021
- The overall mortgage volume has increased by 77% compared with last year.
- Mortgage transactions have reached the highest level since 2016.
- 20,000 entities have been purchased already, which is the highest since 2014.
- The luxury residence sales level is 130% of last year.
- Depending on the type of property and the area, rental yields can grow to 10%, and they are not subject to taxation.
The real estate sector in Dubai seems to be reviving very quickly, and it will probably continue to thrive. The country offers excellent investment opportunities in the private property market, and it may be a good time to buy property now while the economy is still recovering and the legislation is still lenient.
And the excellent quality of life in Dubai may be a good reason to use the purchased property to relocate there or, at least, make it a place for regular holidays.
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