Buying a Property in Dubai
In 2002, the government decided to allow freehold ownership for Non GCC residents, allowing foreigners full ownership of property and land for the first time in designated areas. Anyone who has been involved with Dubai for more than a decade has seen an astonishing amount of change and development in a few short years. Dubai has become a safer place to invest due to property laws, with greater emphasis on value and income rather than overnight capital gains. There are more end-users and investors looking for robust rental returns and no flipping. Other reasons why Dubai is the best place to buy a property are listed below.
Strong Economic Growth
One of the most important things to consider while buying property anywhere in the world is to consider the economic growth of that region. Dubai will be the first Middle Eastern country to host the Expo in 2020. Experts predict that there will be a growth of 35-50% in the region as an effect of the Expo.
One of the biggest benefits of buying property in Dubai is that, the economy of this innovative and dynamic city has been growing at a good pace. While rich in oil, Middle Eastern countries and the capital of UAE, Abu Dhabi’s economy has suffered the punch of recent oil crises, Dubai has flourished and came out as champion of planning and economic growth in MENA region.
By the time we entered in to the second decade of this century, Dubai had already cut its dependency on oil to a level that today revenue generated from oil is only approximately 5 percent of Dubai’s GDP.
Consistently Growing Population
Dubai is a cosmopolitan city where people from more than 200 different countries are residing hence the population of the city is increasing day by day. One of the biggest benefits of buying property in Dubai is that, people from all over the world are coming here in search of better career and business opportunities. The Expo will bring in 25 million visitors to the emirate and create 277,000 new jobs.
The graph below shows us the population growth since 2008, we are in year 2016 at the moment and the population of Dubai has already reached 2.5 million. It is expected that the population in Dubai will grow to 3.5million by 2020. The average population growth rate of Dubai is 4.7% which coincides with its economic growth as. With many new housing projects being launched in Dubai to accommodate the growing population now is the best time for investors to buy properties as we can see high rental yields of up to 8%. There is a large choice in the ever changing landscape of Dubai.
Consistent Development & Innovation
Dubai has established itself as one of the most important destinations in the world. It is already well on its way to become the smartest city in the world. There is always something new about Dubai and that is one of the biggest benefits of buying property in Dubai as well. The property market is ever developing. It is no longer based on speculation but is regulated and sustainable.
Dubai has been consistently ranked as one of the top 5 global centres for trade, logistics, tourism and finance as well as internationally recognized as the leading financial and trading centre at the heart of the Islamic economy. The UAE has one of the best political and legislative environments in the world along with outstanding development in information technology, communications, infrastructure, and innovation linkages.
Dubai was ranked first among the Arab countries by the Global Innovation Index 2016. The innovative ideas presented and initiated by Dubai government is a healthy sign that buying property in Dubai could be one of the best decision of your life.
Higher Rental Return
The real estate market in Dubai offers an average yield of 7 per cent, about 2-3 per cent above the average yield in international property markets, especially when compared to the modest yields that mature markets like London, Paris or New York offer. The best performing areas of Dubai are generating up to 10% rental yield on average. The average rental yield in New York is only 3.91%, in London it is 3.21%, in Singapore it is 2.83% and in Hong Kong you will not get more than 2.82% rental income.
On a very conservative basis, the rental return in Dubai will be not less than 5.82% and that makes Dubai one of the best destinations around the globe for property investors. So if you want to enjoy the benefits of buying property in Dubai, don’t forget about the higher rental income that your real estate investment will generate in Emirates of Dubai.
No Property Tax
Dubai offers investors the benefit of tax free returns and no capital gains tax. These potential benefits are responsible for attracting investors from amongst the globe. Once you have bought the property, paid the registration fee to Dubai Land Department, there is currently no other government tax to be paid against your property at all.
This aspect alone has a great impact on the overall rental yield generated by your property in Dubai. If you were to buy property in Hong Kong, you will end up paying up to 15% annual tax on that property and the ratios in Singapore will be 13%, in London it will be 2.33% and in New York it will be 2.2%. Whereas there will be 0% tax imposed on your property purchase in Dubai and that makes the choice even easier to buy property in Dubai.