Dubai offers one of the highest rental yields in the world which is consistently 6-8% on an average. This is the best time to purchase property in Dubai since prices are on the lower side but rental yields continue to appreciate attractively. Several affordable housing developments in Dubai offer fabulous rental returns to investors.
Some of the areas to look at include Discovery Gardens which offers average increases in excess of 8% while areas like the Dubai Silicon Oasis and Jumeirah Village Circle have notched up the same. International City is mostly close to 8% while the Dubai Sports City takes it close to 9%. These rental yields are higher in comparison to India, London and Singapore among other cities. Dubai is perhaps one of the best places to invest in properties for rental yields since in many countries yields are not even 3% of overall property value. More and more people want to rent in Dubai, particularly people coming from other countries to work here. As a result, there is always healthy demand to cater to this growing population of renters. In fact, high rental yields have also been witnessed in areas like Bur Dubai, Jumeirah Lakes Tower and other areas in Downtown Dubai.
Foreign investors can easily open savings accounts in the UAE and Dubai for depositing their rental cheques. Additionally, in one of the biggest benefits to investors, rental incomes are non taxable. There is no capital gains tax or property tax in Dubai in spite of the UAE having one of the highest per capita income statistics in the world. Even Abu Dhabi does not levy municipal taxes on rental premises and only license fees are sought. The absence of these key taxes in Dubai makes it an investor’s delight to say the least!
This zero tax regime spurs greater growth in the housing and rental markets since investors can enjoy straightforward and highly lucrative returns. Dubai is one of the few places where you will get such tax benefits. One can also obtain Dubai residency by buying property that is valued more than Dh 1 million and this will be more attractive investors taking into the account the tax free status of the UAE. This may also stimulate faster growth in the Dubai property market.
Dubai and Abu Dhabi offer amazing lifestyles to residents and are global entertainment, business and culture hubs. Living standards are world class with top notch infrastructure. Dubai offers the world’s best clubs, bars, restaurants, malls and hangout spots along with easy access to one of the world’s best airports, international schools, top class healthcare and public transportation and of course impeccable safety.
Abu Dhabi is also one of the safest places in the UAE and is home to a cosmopolitan population like Dubai. Both cities are home to a high number of expats and Abu Dhabi is considered attractive for its developed infrastructure, good healthcare and basic amenities for citizens, innumerable recreational destinations, malls and the Corniche. There are direct flights to several global destinations from the UAE. Both cities also rank highly in terms of culture and entertainment with several big ticket global events being held here.
Dubai offers top class infrastructure, being a major trade, finance, logistics and tourism hub. The Burj Khalifa is the tallest freestanding man-made structure while there is a top class infrastructure network. Dubai has been promoted extensively as a trade and investment gateway to the Middle East and also Africa. The cost of doing business has gone down and Dubai is attracting investors with its competitive government fees and easier regulatory and legal processes. Dubai has the 47 mile fully automated Dubai Metro along with top class logistics, seaports, airports, conference centres and industry clusters. There are globally renowned hospitals, hotels, universities, shopping malls, restaurants and entertainment destinations including the observation deck on top of the Burj Khalifa and the indoor ski park. Dubai Duty Free is the biggest single airport retail operation in the entire world. New retail space has also been added to the Dubai International Airport.
Abu Dhabi also offers sound infrastructure and the new Khalifa City will be a major growth driver for the future and encompasses housing solutions for more than 370, 000 citizens, entertainment and sports facilities, schools, ministries, financial institutions and embassies. An Emirati residential neighborhood is also being built. The Government is investing heavily in culture and hospitality and new hotels and resorts are now being built to prepare Abu Dhabi for future growth. The Saadiyat Island Cultural District is a major hub in Abu Dhabi and will have three major museums, namely local branches of the Guggenheim and Louvre along with the Zayed National Museum.
The Dubai Expo will open on the 20th of October, 2020 and end on the 10th of April, 2021. The Expo is expected to draw a whopping 25 million visitors and add in excess of $23 billion to the economy, thereby spurring real estate growth. The Expo will boost tourism and has also spurred Governmental interest in public spending on infrastructure. This has boosted demand for real estate as well, particularly in locations closer to the Expo. The repositioning of Dubai as one of the world’s biggest business hubs will continue to aid the realty market for a very long time.
The Government will spend a forecasted $7 billion on infrastructure in the lead up to the Expo. The real estate market is already witnessing an upswing with property prices increasing and investors will witness fabulous returns once the Expo takes place. The Expo is also expected to create a whopping 277, 000 jobs, thereby boosting employment and indirectly influencing increased demand for homes and rentals. The UAE construction market has been fueled by infrastructure spending in Dubai ahead of the Expo 2020. The construction market in UAE should witness 6-7% of growth and several planned projects in energy and real estate are progressing very well. Major projects driving growth include the expansion of the Jebel Ali Port, the Route 2020 Metro extension on the Red Line and the expansion of the Al Maktoum Airport among others. The Eithad Rail phase two which will link Dubai and Abu Dhabi has also got assured funding and is currently in the works. The rail service will boost economic growth and give Dubai a competitive advantage over its peers.