Why Are More Indians Investing In Dubai? An In-Depth Look Into Dubai Real Estate Trends

Dubai, acknowledged as one of the most multicultural cities worldwide, is a thriving global centre for trade, innovation, and tourism. With its robust economy and cosmopolitan culture, the city offers high living standards. Furthermore, Dubai boasts many awe-striking real estate projects, ranging from luxurious islands and skyscraper apartments to out-of-the-box office designs and splendid hotels.

What lures global investors and specifically, Indian investors towards Dubai real estate? Let's drill down into key factors propelling the property demand in Dubai, how it stands against other global markets, and the challenges and opportunities in its real estate sector.

Dubai's Real Estate Market Overview

The real estate market in Dubai is like a flourishing garden: full of life, variety, and investment opportunities for everyone. What it has accomplished in terms of growth is quite remarkable. Exciting data from the Dubai Land Department supports this image, displaying a 55.5% increase in the total value of property transactions over the last year. This reached an astounding AED 409.8 billion by January 26, 2024.

A large increase in the volume of transactions has also occurred. As of 26th January 2024, there have been 132,616 total property transfers, an incredible 37.3% increase from the last 12 months according to Bayut. These insights show how exciting and hopeful Dubai's real estate market is, and it's great to see it grow. You feel like you're seeing a carefully cared-for plant produce the most beautiful flowers!

Dubai's property market is shaped by these key factors:

●Population Growth

Dubai is home to about 3.65 million people, with a strong annual growth rate of 10.7%. The city's diverse population drives demand for residential, commercial, and hospitality properties.

●Economic Growth

Dubai's economy grew by 3.6% in Q2 of 2023 according to Emirates NBD Research and includes a mix of sectors like tourism, trade, and finance. That means more demand for commercial and leisure properties.

●Government Policies

The government has introduced policies that make the real estate market more attractive, such as long-term visas, freehold ownership, and rental reforms. These create an investor-friendly environment.

The UAE's Golden Visa scheme in Dubai rewards high-value real estate investors with long-term visas. With an investment of AED 2 million, investors get a 10-year Golden Visa, and AED 750,000 nets a 2-year visa.

Benefits include long-term residency, freedom of movement, family sponsorship, and tax perks. The scheme now also covers off-plan and co-investment properties.

Why are Indians investing in Dubai?

Dubai's appeal as a tourist destination is well-known, but it's also becoming an investor magnet, especially for Indians. Indian investors were the second-largest group of foreign investors in Dubai in 2023 according to the Dubai Land Department, with transactions worth AED 14.8 billion. Indians represented 14% and 13% of the total foreign investment value and volume, respectively, in Dubai's real estate market in 2023.

But what makes Dubai so appealing for Indian investors?

Factors attracting Indians towards Dubai include:

-Easy Connectivity

The short span of flights between India and Dubai and frequent, reasonable flights have made it convenient for Indians to travel and conduct business in Dubai.

-Tax Benefits and Incentives

Dubai's tax-free status, coupled with long-term visas, freehold ownership, and rental reforms, positions it as an attractive investment opportunity for Indians. Both the Dubai Land Department and the Department of Finance confirm property tax exemption on completed properties.

-Profitable Returns

Stable capital values and high rental yields, coupled with low service charges, render Dubai an attractive investment option for Indians.

According to Bayut's research, the typical ROI in Dubai for residential properties is between 5-7% and 7-9%.

While in India, the average ROI in top cities are Mumbai at 4.05%, Delhi at 2.8% and Bengaluru at 4.35%, according to Anarock Research Q3 2023 report.

-Lifestyle and Cultural Compatibility

Dubai's impressive global rankings for quality of living (83rd in Mercer, 201st in Numbeo, 14th in Expat Insider) and its investment-friendly attributes like stable property values and attractive rental returns, make it an ideal investing spot for Indians.

Preferred Property Types and Locations by Indian Investors in Dubai

Indian investors are broadening their horizons in Dubai's real estate market. They're exploring both the trusted secondary market and the exciting, up-and-coming off-plan market. They're especially drawn to compact apartment options like studios. The popularity of a studio for rent in Dubai is driven by the booming young professional population, which presents an attractive investment opportunity. With good rental returns, low maintenance costs, and an easy-to-find tenant base, studios are quickly becoming a favourite choice among the Indian investment community.

Let's break down the key preferences of Indian investors in Dubai's blossoming real estate market:

Property Type: Indian investors have been showing interest in both secondary and off-plan markets, but what catches their eye are apartments; particularly, studio apartments and one to two-bedroom flats in chic buildings.

Aspects they Value: What makes these apartments irresistible to investors is a combination of factors. Strong rental returns, low maintenance costs, and the fact that they appeal to the increasingly young workforce in Dubai, thereby maintaining high occupancy rates.

Preferred Locations: Indian investors are keen on high-end residential communities that mix city living with comfort. Premier neighbourhoods like Dubai Marina, Downtown Dubai, and Business Bay are often their first choices. Some insights about the locations:

	Dubai Marina	Downtown Dubai	Business Bay
Price per sq ft (AED)	1,737	2,637	1,841
Price per sq ft (INR)	39,300	59,670	41,650
ROI	7.15%	6.56%	6.60%

(Prices and ROI as per Bayut’s 2023 Sales Market Report)

The Final Note

This blog has helped us unearth important insights into the fluctuating trends and the promising future of Dubai's real estate market. As we delve deeper, we can foresee certain future trends and developments in Dubai's real estate sector.

With the continual growth of the population and a diversifying economy as a solid base, the real estate market is likely to gain intensity and promise lucrative returns for both local and international investors. With clear strategies, a comprehensive understanding of the market, and the right opportunities, a promising profitable venture is waiting for you.

Discover Dubai, Where Dreams Meet Reality!

(This article is part of IndiaDotCom Pvt Ltd’s Consumer Connect Initiative, a paid publication programme. IDPL claims no editorial involvement and assumes no responsibility, liability or claims for any errors or omissions in the content of the article. The IDPL Editorial team is not responsible for this content.)