Dubai Opportunities: Profitable and Reliable Investments

11:18 pm  |  28.11.2023

The real estate market in this small emirate has become a focal point for global investors. According to the Dubai Land Department, there were over 61,000 transactions from January to June 2023, a significant 43% increase compared to the same period last year.

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Types of Real Estate Attracting Investors

Dubai’s real estate offerings span economy, business, and premium classes, catering to diverse investor preferences and yielding profits accordingly.

  • Economy Class: This includes compact studios starting from 30–36 sq. m and one-room apartments from 45–50 sq. m. These units typically come unfurnished, lacking additional on-site amenities, and are geared towards a budget-conscious clientele.
  • Business Class: Medium-sized apartments starting from 40 sq. m fall into this category. Studios, one-room, and two-room apartments come unfurnished but include built-in electronics. Security, swimming pools, gyms, and other amenities are standard, with ceiling heights around 2.8 m.
  • Premium Class: Apartments in this class start from 100 sq. m, featuring higher ceilings (3.3–3.5 m), Smart Home systems, and appliances from renowned brands. Premium housing is often fully furnished and boasts luxurious amenities such as concierge services, libraries, and sports complexes. Investing in premium-class real estate, especially during the construction phase, can yield returns ranging from 10% to an impressive 100%, contingent on factors like location, project quality, and the developer.

Minimum Cost of Housing in Dubai

The cost of housing varies based on factors like location, project type, and developer. For instance, in International City, a studio can be purchased for $100,000 with a yield of 5–7% per annum.

READ: Investments in Dubai: Discovering Hidden Gems

Most Attractive Neighborhoods

Investors find certain neighborhoods particularly appealing, including Dubai Marina, Dubai Hills, Emirates Hills, Meydan, District Van, Downtown, Business Bay, and Dubai Creek.

Renovation Costs in New Buildings

Unlike some countries, properties in the UAE are sold with complete renovations. Basic renovations may cost around $20,000, while more extensive ones can range from $100,000 to $150,000, depending on the client’s preferences. Luxury, premium, or business-class apartments typically feature high-quality finishes.

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Does Renovation Impact the Investment Appeal of Housing?

Whether or not to embark on renovations significantly hinges on the specific project. Townhouses and villas stand out as prime candidates for renovation when the buyer aims to maximize their profit. Penthouses, along with two- and three-room projects situated on the first lines of the coast, can yield returns ranging from 30% to an impressive 150% after self-renovation. 

It’s worth noting that, in Dubai, the majority of projects are turnkey, meaning buyers finalize the deal and move into fully equipped rooms with kitchens upon receiving the keys, leaving only the furnishing aspect. 

Unfinished projects are rare in Dubai, mainly limited to villas. Even then, they may only lack finishing touches, making it an exception rather than the norm.

Understanding the Mortgage System

The UAE’s mortgage regulations and installment plans undergo frequent changes, typically every two months, influenced by global inflation and interest rate fluctuations. Until February of this year, even non-residents living in the UAE could secure a mortgage. However, recent legal changes now necessitate residency, a bank account, and a minimum salary of 10,000 dirhams. Notably, some construction companies have ceased offering installment plans, requiring buyers to make payments over the subsequent two to three years after receiving the keys. Nevertheless, during the foundation pit stage, most developers still provide installment options. Keeping abreast of these evolving regulations is crucial for those navigating Dubai’s real estate landscape.

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