What makes Dubai a Promising Destination for Real Estate Investment?

Dubai Real Estate Market

Dubai, a city of gold, has always been celebrated for its ultra-modern camaraderie, gold-standard opulence, state-of-the-art facilities, architectural marvels, rich maritime history and unmatchable finesse in every aspect. Now, it has also built its reputation as a top global financial and investment hub. And among all the available lucrative investment opportunities, Dubai real estate is the most promising one.

Recently, Dubai is dubbed the best place to live, work, invest and visit in 2023 and both the government and several other stakeholders played their role in it. The city has been put to test given the unpredictable market condition during the COVID-19 induced global pandemic and it emerged victorious. Despite all these challenges, it remained resilient and the UAE government also played a crucial role to make it an appealing city with post-pandemic strategies and reforms.

Dubai – Celebrities’ most favourite city

It is not wrong to state that the metropolitan city has kept wealthy investors, rich entrepreneurs and famous celebrities spellbound over years. And lucrative real estate investment is one of the major reasons behind their love for this country. Several A-list celebrities including Shah Rukh Khan, David Beckham, Tom Cruise and Lionel Messi have properties in Dubai. Recently, an Indian business tycoon bought the most expensive villa in Dubai for $163 million.

This interest has escalated prices and the sales volume of properties for sale in Palm Jumeirah, Dubai Marina, Downtown Dubai and other prime areas in Dubai and also made them more desirable and profitable. After all, who does not want to share the neighbourhood with an A-list celebrity and enjoy some lucrative returns?

Let’s explore the topic deeply and see what makes Dubai properties, a lucrative investment opportunity.

The growing numbers

Dubai is a dream city, where people from every country of the world come to explore employment opportunities, expand their businesses and find a comfortable lifestyle. Since the population is growing, the demand for properties for sale in Dubai is increasing accordingly at a rapid pace. And to accommodate this rise, both the developers and government have been bringing in more investment opportunities in Dubai. The UAE government has introduced a detailed Dubai 2040 Urban Master Plan, which is key to bringing ideas to life.

Since the UAE government opened its international borders, thousands of expatriates from all over the world have been relocating to Dubai, and a majority of them have been investing in properties for sale in Dubai for a secure future and promising returns.

Dubai real estate market showing upward trajectory

UAE government to develop and control FDI Unit

December 2022 concluded on a positive note for Dubai real estate sector, which also laid the foundation for a promising 2023. It has been showing an upward trajectory more than ever before. The year concluded on a positive note for the Dubai real estate market and December proved to be a record-breaking month, with a further rise both in demand and property values.

According to the official data released by Dubai Land Department (DLD), the real estate transactions in December 2022 are valued at AED 26.1 billion in total, with a total number of transactions crossed the 9,500 mark.

Dubai depicts the highest growth

The growth of Dubai real estate sector is not a surprise as the Dubai properties’ values grew at a steady pace. With a large number of luxury properties in Dubai continuing to be sold in prime areas, it can be understood that robust demand conduces the launch of luxury projects in Dubai. Dubai real estate is a star performer that has added more to the economic growth of the country, both in terms of volume and value.

According to a recent report published by Knight Frank, real estate experts forecast a price growth of 13.5 per cent for Dubai properties, in 2023. On the contrary, around 2 per cent price growth is expected on average across the major real estate markets in the world. However, Dubai shows the strongest price growth across the globe, whereas cities like Miami, New York, Paris, and Singapore will only achieve single-digit growth.

Dubai real estate – A millionaires’ playground

Unbelievably, more than 2,000 millionaires moved to Dubai in 2021 alone in search of a safe and comfortable lifestyle. In 2022, we have observed a sharp spike in the demand for luxury properties for sale in Dubai. Dubai prime areas remained in higher demand, with property prices up by 90%, and even after this much hike, luxury villas (in particular) were not enough in numbers to meet the potential buyers’ demand. In short, luxury properties in Dubai became one of the most favourite investment options in Dubai for wealthy investors.

According to Knight Frank’s 2023 Prime Predictions, prime residential areas include the neighbourhoods of Al Furjan, Palm Jumeirah, Jumeirah Bay Island and Emirates Hills, where it is expected to see a rise of 13.5% in property prices in 2023. Due to Dubai’s safe haven status, we can expect more high-net-worth individuals to invest in Dubai real estate in search of luxurious second or holiday homes here.

Dubai’s affordable housing sector

Dubai Real Estate Market

It is neither surprising nor alarming. We know that Dubai luxury market remained the most in-demand property segment for the last two years but there has always been a demand for affordable housing in the city. The demand leads to the launch of a new property segment, which is an opportunity for potential earnings for potential investors. Though Dubai’s affordable housing market has both opportunities and challenges but it will be interesting to see how investors reap benefits from this segment.

The government has announced several initiatives to support affordable housing option in Dubai but as per property agents in Dubai, the shift towards affordable housing is one of the main trends in Dubai, and prices of affordable homes can be lower than AED 400,000.

Rise of smart homes

The rise of smart homes in Dubai real estate sector in 2023 is another opportunity in disguise that can help investors reap benefits from this city. Modern and smart homes have changed how residents live in their homes and interact with their homes’ features including adjusting the temperature according to the need to turning off the lights. There is always room for innovation in the market and the integration of advanced technologies and the increasing demand for a comfortable lifestyle have made smart homes popular in Dubai.

Smart home security system is one of the most commonly-used modern technology, allowing people to feel more comfortable, safe and secure while being away from their homes.

Vacation homes in Dubai – An emerging profitable idea

Dubai is one of the most densely populated cities in the United Arab Emirates (UAE) and following the post-pandemic strategies, it has become one of the most preferred destinations for real estate investment. Every new development has some modern features and innovative technologies making it unique and desirable. These factors add more value to the development and also ensure considerable returns on investment.

However, not every millionaire invests to live in Dubai but they want to use this property as their holiday homes. In their absence, they let them ahead to earn profit.

Nested, a London-based real estate agency, has conducted a study to compare the average time to recover property investment through traditional rental services versus short term or holiday rentals. And according to the results, vacation rentals prove to be a better investment option, especially in cities like Dubai because investors can recoup their investment quickly.

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