Indians shine in Dubai's property market, drawn by tax advantages and lucrative rental yields.
As per a report from the Pakistan daily ‘Dawn,’ Indians lead the pack in owning residential properties in Dubai, boasting a whopping 35,000 properties with 29,700 individual owners among foreign nationals. Following closely behind, Pakistan claims the second spot with 17,000 owners holding 23,000 residential properties in the vibrant city of the United Arab Emirates. What motivates Indians to engage in real estate ventures in Dubai? What underlying forces propel this trend? Dubai’s appeal among foreigners can be attributed to myriad factors. Let's delve into a few of them.
One of the key factors that render Dubai an attractive destination for real estate investment is the city's dynamic economic development. Dubai boasts a diverse economy, with sectors such as tourism, real estate, trade, and logistics fueling its growth. Notably, there has been a surge in demand for real estate in both the commercial and residential sectors. Projections indicate that the Dubai real estate market is poised to expand by approximately 15% in 2024, buoyed by a strong economy and keen interest from foreign investors.
The implementation of golden visas in Dubai has garnered significant attention from investors. These visas offer relaxed home ownership regulations for foreign residents in Dubai, creating a favourable environment for investment. Indian investors, for instance, who acquire real estate valued at two million Dirhams or above, can qualify for a 5-year visa to live in Dubai, with the option for renewal under the same terms. Notably, Dubai's no capital gain tax adds another layer of appeal to real estate investment. The city's business-friendly atmosphere and tax policies further contribute to its attractiveness as a destination for investment.
One of the primary draws for Indian investors to Dubai is the high rental yields available in the city, outperforming those in major Indian cities like Mumbai and Delhi. With rental returns ranging from 4% to 7% annually, coupled with the absence of taxes on property rental income and capital gains, Dubai presents a lucrative investment opportunity.
Many High Net Worth Individuals (HNIs) choose to invest in Dubai to diversify and de-risk their portfolios. While their main investments remain in Indian rupees, they opt for alternate asset classes in dollar terms, leveraging the fact that the Dirham is pegged to the dollar, thus providing stability and potential growth in their investment portfolios.
Dubai stands out as an attractive destination for middle-class Indian investors seeking secure investments with high returns, primarily due to its relatively lower property costs compared to major cities like London or New York. The affordability factor coupled with the promise of substantial returns makes Dubai an ideal choice. Moreover, the Dubai government has initiated several programs aimed at enticing real estate investors.
