Is Dubai a good place for real estate investment?

Real estate companies in Dubai are worth gold. Well almost. In any case, these two values ​​are the pair: demand is not drying up and investors consider them as “safe havens”, the safest savings markets. Gold, a precious metal that has been inconvertible into money since 1971, still retains its strengths. But real estate has no shortage of arguments to supplement your income and responds with panache.

Whatever the period, however hard it may be, everyone is looking for accommodation. In the Real estate companies in Dubai market, supply and demand change little. Crises sometimes delay purchases, but buyers rarely abandon their plans. Once the purchase is made, the owner-investor will always have a good chance of finding a durable or seasonal tenant, active, vacationer or student who does not want or cannot afford a home.

This year illustrates it wonderfully: if for many economic sectors 2020 looks like a cataclysm, Real estate companies in Dubai have held up well. At the end of September, the number of transactions carried out over the last 12 months in mainland Dubai had fallen by only 5% and was close to one million transactions. Prices in old buildings continue to climb (+ 4.2% for houses, + 6.5% for apartments). As for new home prices, they are likely to skyrocket: town halls are granting fewer and fewer building permits and real estate developers, in crisis, are no longer able to deliver enough housing to support demand. The only downside is the vertiginous drop in sales of commercial real estate, with companies preferring to rely on teleworking.

All goods are valued

For Bassel Abedi, founder of the investor advice site, it is clear: “It is always the time to invest in stone. Real estate continues to appreciate and walls never disappear. By doing it well, we can reduce risk taking as much as possible, which we cannot necessarily do on the stock market. ” For him, crises serve to restore credit to certain homes that are often shunned. “For example, the coronavirus made it possible to upgrade a first floor apartment with a private outdoor space in the city center.. Many families are looking to escape to large houses with gardens or even swimming pools. more remote periphery. “The proliferation of teleworking has the potential to change investors’ habits.. Some Real estate companies in Dubai brokers foresee a stagnation or even a small drop in the prices of larger spaces in large cities, particularly in UAE.

In Dubai, the State is in need of housing values ​​rentals. Many tax exemption systems exist to help homeowners lend their property. What is more, long-term bank loans are maintained at historically low rates: around 0.8% for a 15-year loan, while you will be able to buy a home of 55 m² (average area over the whole of mainland Dubai) without contribution by repaying Dirham 800 for 20 years to your bank.

Thus, today the return on Real estate companies in Dubai, between 3 and 5% depending on the way of investing, greatly exceeds that of savings accounts. Life insurance has a ceiling of around 2%, home savings plans at less than 2% and the livret A at 0.5%, to name only the main ones.

Banking brakes

Be careful, however, when proposing your purchase plan to financial institutions. The banks, increasingly regulated in particular by European legislation, are showing reluctance and asking for greater guarantees from future buyers. You will thus be required to withhold a remainder to live for daily expenses of 850 Dirham per month for a single person and 1500 Dirham for a couple, after the payment of your debts (credits, bills). This is Dirham 50 more than before the Covid19 crisis. This does not prevent small budgets from investing: meager scholarships can choose to take a stake in a real estate project from Dirham  500.

Dry purchase

The first solution is based on a classic acquisition of real estate Properties for Sale in Dubai, financed by a net contribution and a bank loan. To find your way around, it will be necessary to assess the dynamics of the shopping district, the evolution of prices in the chosen environment and the profitability of the property. A medium-sized, student and attractive city which extends or modernizes part of its public transport is ideal. Rental demand remains strong there due to the presence of students, salespeople and a generous employment pool. The value of the property should increase thanks to the urban transformations made possible by the new metros, trams and even urban cable cars. The first prices are around 30,000 Dirham. You will find yourself there if the profitability of your property oscillates between 3 and 5%.

For neophytes, real estate brokers advise to turn to small surfaces, studios or Properties for Sale in Dubai. Of course, the smaller the area, the more the price per square meter grows, but in the end, a modest and functional home will always cost less than a spacious house. In addition, the apartment will require less maintenance and will remain easier to manage.

Note that new housing, more expensive, depreciates quite quickly. In the old days, you could do tax work and offer a comfortable home with a lot of charm. If you furnish it, the state will grant you further tax reductions.


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