Buyers Eyeing Creative Ways to Invest in Dubai Real Estate
Dubai is one of the hottest real estate markets in the world and it has not just been increasing in its popularity but in terms of property pricing as well. Thus a majority of potential property buyers intend to find creative ways to be a part of this market; investing in off plan projects in Dubai, and turning to fractional ownership are a few of them. According to data issued by the Dubai Land Department (DLD), the ever-growing Dubai real estate market has recorded more than 188,000 transactions, worth AED 625 billion – as of November 2024.
This data shows a whopping 38 per cent increase in transactions and a 23 per cent rise in property values compared to 2023. Overall, these numbers represent a 33 per cent growth compared to the same time in 2024.
What makes Dubai real estate so attractive?
It is a known fact that Dubai is one of the safest cities in the world, making it an ideal place to raise your family. Moreover, the changing residency rules of the city coupled with low taxes, high returns on investment and modern infrastructure – make the city of skyscrapers more and more desirable with time. High net worth individuals from all over the globe have been registering their interest in Dubai real estate and countless other property buyers (who belong to middle-income strata) have also been following in their footsteps.
After the pandemic, this property market has witnessed a record-high interest in both luxury and affordable ready-to-move-in and off plan properties in iconic developments like Dubai Creek Harbour, Business Bay and Palm Jebel Ali Dubai. This has led to a consistent rise in the average value of residential villas and apartments and off plan properties as well. According to a report, the prices of prime residential properties in Dubai grew by 7 per cent, compared to average property prices recorded in 2023. Resultantly, investors have shifted their focus more towards off plan projects in Dubai – due to its significant price difference with the ready properties.
Despite a spike in property prices, the Dubai real estate market remains hot and attractive for potential investors. Let’s find out creative ways that buyers are participating in this market.
Fractional Ownership – REIT
Despite being a desirable real estate market, Dubai is pricing out buyers. Therefore, it has led potential investors to find creative ways to seep into the real estate market and fractional ownership is one of them. REIT (Real Estate Investment Trust) is a security scheme that operates like a stock scheme but in the majority of cases, it operates on real estate investment or related assets.
REIT schemes give investors exposure to a number of income-generating properties without having to directly own them or to have their full ownership. According to an official, “REITs provide the market with greater accessibility, as investors can access real estate with comparatively small amounts of capital.”
Slipping into the affordable luxury property market
Factually speaking, Dubai is one of the most active luxury property markets in Dubai. Not just ready-to-move-in luxury properties gain traction but off plan projects like Palm Jebel Ali Dubai become hit soon after the announcement. According to a report, 190 luxury homes worth more than $10 million were sold in the first half of 2024 – compared to New York (130) and Miami (102).
According to Knight Frank’s Wealth Report published in 2024, $1 million secures around 980 sq. ft. of luxury residential space in Dubai compared to 366 sq. ft. in New York and 355 sq. ft. in London. Though price is not the only factor that makes Dubai property market but several other factors work together to make this market the most sought-after such as tax benefits, ease of property purchase, favourable visa policies which can also lead to permanent residency in the country, value appreciation, and easy availability of mortgage to both locals and global investors.
Appealing taxation environment
Do you know that Dubai is a tax-free emirate that levies no tax on personal income and capital gains? It is one of the most appealing factors for property buyers – especially for citizens accustomed to higher tax rates, in their countries. Furthermore, owning a property in Dubai can also lead to eligibility for a Golden Visa – if you are eligible and meet certain conditions.
The investors must at least invest AED2 million to qualify for the Golden Visa in real estate and interestingly, it can either be ready-to-move-in properties or off-plan projects in Dubai.
Preferred locations to invest in properties
Downtown Dubai, Dubai Marina and Palm Jumeirah are a few of the most desirable prime neighbourhoods in the city. Recently, emerging areas like Dubai Creek Harbour, Dubai Hills Estate and Palm Jebel Ali Dubai have become investors’ favourite for their modern infrastructure and positive growth. High net worth individuals invest in exclusive neighbourhoods – in luxury properties (both villas and apartments) worth millions of dirhams.