Dubai is one of the top destinations not only for tourists but also for investors. Among the best and most attractive investment options is the Real Estate market. Despite the modern options available to people nowadays to invest in bitcoin, stock market, bank products, investment funds, etc. Real Estate remains one of the most lucrative investment avenues even today. Since our birth till now there is a certain fact saying that real estate investment is considered one of the safest and best options for investing. It is considered that way for multiple reasons: it provides security to investors and is a hedge against inflation, it is a physical asset that is excellent for portfolio diversification, it is non-volatile and essentially risk-free over a long period of time and is available to everyone as opposed to for experts only and can generate yearly passive income of 7%-12% from your total investment. But why is Dubai so popular among investors?
Why invest in Dubai real estate?
A very famous American businessman and author, Robert Kiyosaki once said, “Real Estate investment, even on a very small scale, remains a tried and true means of building an individual’s cash flow and wealth.”
Dubai is located between east and west, has world-class infrastructure and growing tourism sector has evolved into an investment hub. Dubai can offer a wide range of opportunities and benefits, when it comes to investments.
The main trends in investments have changed. If the most important factor of whether to invest or not was location, now investments are no longer confined to the geographical boundaries. People are investing in cities with developed economy in order to earn good returns. So, what made Dubai one of the main destinations for real estate investors?
- Dubai is the fastest growing emirate compared to other six emirates in UAE
- Dubai has a robust economy
- Consistently growing population
- Development and innovation of the city is beyond imagination.
- Political situation in Dubai, and the rest of the country is very stable
- World Expo2020 attracting about 25M people from 175+ nations.
- Numerous projects with attractive offers and deals.
- High Return On Investments.
Dubai real estate investments and market situation
Before trying to understand future trends and forecast of Dubai real estate market for the year of 2019, it is important to understand its performance in previous years. Since 2015 Dubai real estate market has been through ups and downs. Dubai real estate prices declined a lot in the period from 2015 till 2016. Since then, real estate market has been in a recovery state.
Even though the prices didn’t fall as much, but it brought significant changes to the market. The average sales price decreased by around 5.6% in 2017, while the average rents fell by 7%. It can be considered that price correction was the main reason behind the decline and this made the market become one of the hottest in the past two decades. In 2004-2006, when Dubai was expanding rapidly, 25% of all cranes in the world were located in this small city.
Another major reason for the market decline was oversupply. Due to Expo 2020 developers started launching numerous projects without meeting actual demand. It led to price decline on ready property and off-plan. Earlier, international investors were focusing on high-end and luxury properties but in the recent years that demand has shifted towards smaller and more affordable units. Looking at the shifting trend, developers had to adjust and shift their focus, as well.
Course towards stabilization
A number of governmental programs and policies implemented in 2018, like the 10-year investor’s visa, 100% foreign ownership of UAE-based companies, stabilization of UAE economy due to the rise of oil prices, special offers from developers which allow to pay 60% of the purchase price after completions, will definitely bring a positive effect on the Dubai real estate market.. Dubai has experienced influx of Chinese investors, lately, which made Dubai government provide visa on arrival for all Chinese nationals.
Dubai property market is expected to be recovering in the early part of 2019, before it kicks back to become the hottest real estate market by late 2019. For those who want to invest in Dubai Real Estate market – middle of 2019 is the best time to buy allowing sufficient time to plan for it.