The real estate sector in UAE is unarguably on the growth radar, with Dubai accounting as the significant contributing city. In May 2022, Dubai chronicled around 6,652 property sales worth AED 18.4 billion. It reflects a hike of 51.6% in volume and 66.14% in the growing value of real estate compared to the same period in May 2021. Here are the pivotal factors that have led to the boom in UAE’s real estate segment.
Reasonable Prices with Superior Yield
The average annual rental yield concerning the properties in Dubai is nearly 5.19%, as per the industry reports. The yield is twice as compared to 2.9%, 2.7%, 2.5%, and 2.4% in New York, London, Singapore, and Hong Kong, respectively. Besides, the price per square meter for properties in Dubai is less expensive than the other big international cities. Such factors attract prospective real estate investors, making Dubai’s real estate market the most competitive one.
No Property Tax and Competitive Interest Rates
There is zero property tax in Dubai encircling homes. Likewise, no income or inheritance tax arises out of the residential property. Speaking of the other major countries worldwide, the considerable tax on properties hamper the ROI.
The forthcoming real estate projects in Dubai are offering pocket-friendly payment plans. Hence, investors would not have to break the budget to own a property in the city. Many financial institutions and leading banks are shrinking the interest rates on residential property mortgages. Therefore, it benefits the buyers, boosting the sales of housing units rather than renting.
Amendments to Golden Visa Rules
Though the Golden Visa has been prevalent in the UAE for a few years, the latest amendments to its eligibility criteria have reinforced its accessibility. Earlier, one had to invest AED 10 million in the UAE with 40% investment belonging to the real estate sector to get a residence visa for ten years.
As per the new amendments from September 2022, one can avail Golden Visa for a minimum investment of AED 2 million into real estate. It would be applicable whether the property is mortgaged or off-plan. Dubai offers a visa to property investors valid for three years upon owning a fully paid-up real estate asset with a minimum value of AED 750,000.
Best-in-Class Amenities and Unappalled Hospitality
The affordable lavish lifestyle and amenities Dubai offers entice homebuyers to reside in the city. Similarly, the city’s measures for ensuring the privacy and safety of the residents are unmatchable across the globe. The UAE is ranked third amongst other countries globally for facilitating effective management to curb the Covid-19 spread.
Dubai 2040 Urban Master Plan
The Dubai 2040 Urban Master Plan is a sizable factor that plays a significant role in stimulating the UAE’s economy. Likewise, it is also responsible for the rush in the real estate sector. This highly anticipated project aims to bring out substantial changes in the real estate backdrop of the UAE in the upcoming 20 years. Being a futuristic and comprehensive plan, it will improve the quality of life for the ones residing in Dubai. Further, this plan will strengthen Dubai’s status as a global hub for investors, tourists, and citizens.
The Final Words
The futuristic vision of the UAE, its capacious response to crisis management, zero property tax, affordable interest rates, and excellent hospitality are the critical stimulators for the real estate boom. Apart from these, the relaxation in citizenship provisions alongside the Dubai 2040 Urban Master Plan will attract expatriates and investors to work and reside in UAE.
