To invest or not to invest: Dubai’s dilemma in real estate

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Readers who spend hours and hours looking for an answer to the dilemmas of real estate investing in Dubai are familiar with its challenges. The United Arab Emirates is located on the Arabian Gulf coast with a rich history that is interspersed with commerce, oil, industry and property.

This story is overtaken by a future that promises a landscape suitable for expansion and investment. But Dubai’s real estate investment dilemma in this region has raised many questions about its viability. The time has come to calm these things down and declare the UAE not one of the best, but “the best” place to invest.

For starters, the UAE has consistently demonstrated its prowess as an investment destination by earning the title of the 13th most promising domestic economy for investment in 2017-19. The region is expected to attract more than $ 1.8 trillion in global investments in 2018 (a 5% increase from 2017).

Due to its strategic position on the global scene, it offers the best investment opportunities from the leading real estate companies in Dubai. The UAE served nearly 2.4 billion market traders in 2017 in just five hours according to recent reports from Thomson Reuters.

The region is also the third most attractive investment destination for those in infrastructure.

With more than a hundred smart city initiatives going into effect as part of a plan drawn up for the next EXPO, opportunities for investors abound. More than a thousand government services have already gotten smart in 2017.

REIT

REITs or real estate investment trusts in the UAE are gaining more and more common ground. The country’s REIT sector increased significantly in 2017 with a series of high-profile acquisitions, such as the purchase of The Edge, Uninest and South View School by ENBD REIT.

While they only represent a small part of the sector, they are expected to be a great way for small investors to enter the market.

Freedom of absolute property

The introduction of the Freehold Decree in Dubai in 2002 was the first platform that allowed foreigners to buy, sell and lease properties.

The Decree helped launch multiple projects such as the ‘New Dubai’ area comprising the Dubai Marina, Jumeirah Lake Towers and Emirates Living.

This helped promote the growth of construction, architecture, engineering, and other real estate services. Over time, Dubai became a global hotspot for investments attracting the best and the brightest.

High return on investment (ROI)

The ultimate purpose of any investment is to get more out of your investment. The UAE controls an ever-flourishing real estate market that grows with its population.

Dubai’s real estate assets have generated a 120 percent return for investors in the decade since the global financial crisis. The region’s will is that real estate investment in Dubai Real Estate ranked second after investment in the Nasdaq index at the time.

During the first quarter of 2017, the Dubai Land Department reported deals worth AED77 billion (US $ 20.9 billion) in the first three months of the year, compared to AED 54.7 billion ($ 14, 89 billion) in January to March 2016.

The data for the same in 2018 showed a similar trend with transactions during the first three months for a total of Dh58 billion through 13,759 sales. This constitutes 9,092 sales transactions worth approximately Dh 19 billion, 3,717 mortgage transactions worth Dh 30.6 billion and a further 950 transactions valued at Dh 8.4 billion.

The first quarter also attracted 5,041 foreign investors who made more than 5,000 transactions with a total value of more than Dh10 billion.

All these numbers paint a prosperous outlook for the real estate sector in the UAE, ending the question of investing or not.

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