The Dubai Property Boom is Coming
Dubai offers one of the most exciting investment opportunities in the world. It’s property sector is currently experiencing an exciting growth cycle, signalling a boom that’s expected to last until the hosting of Expo 2020. Dubai property boom is coming!
Early 2017 performance has indicated this surge may already be on its way. The Dubai Land Department’s transactions report up to 30 June shows transaction growth has increased by over 25% compared to the same period last year.
How is Dubai Property Boom is Coming reflecting on UAE Economy
The UAE has long relied on the fortune of the oil industry to drive growth. However, indications are showing this is set to change as the economy seeks to diversify away from its primary commodity. The oil sector now makes up for less than 1 per cent of Dubai’s GDP.
This is great news for the Dubai property sector, showing it can stand on its own two feet. The Emirate has instead become an appealing destination due to its thriving tourism, real estate and construction industries. Similarly, smart infrastructure and city planning combined with a more tolerant culture has helped Dubai welcome visitors and investors of all nationalities.
The stable overall economy of the UAE is another positive appeal. The local Dubai economy improved at a faster rate (2.85%) than average GDP growth of 2.4% globally. Other good news is that the UAE dirham is pegged to the US dollar which is currently unaffected by currency fluctuations.
As noted, Dubai will also serve as host of Expo 2020, a proven catalyst of major economic activity over a number of sectors. Buy-to-let will greatly benefit in particular, with over 25 million unique visitors expected over a six-month period.
2017 has witnessed a positive surge of overseas investments, notably from wealthy Saudi, Indian and Chinese property magnates. Sales of around £2.51 billion were completed during the first two weeks of the year alone – a record figure for Dubai and a reliable indicator of the positive growth in the months since.
UK investors should take note. Acquiring foreign property is the perfect way to diversify your portfolio and mitigate risks. Dubai is currently offering more value than rival markets in Singapore and Hong Kong. Lower entry prices provide healthier rental yields on your initial investment.
Dubai is noted for its buyer-friendly conditions, especially in relation to taxes. There is a 100% exemption on rental income and capital appreciation, as well as no income tax to pay. However, it’s advised to seek professional advice regarding the UAE’s tax regulations before making a property purchase.
One reason for the expected boom is increased residential supply. Property consultants Cavendish Maxwell expect over 30,000 homes to be added to the Dubai market by the first quarter of 2018, the majority being apartments.
More activity and gains are expected after Cityscape in September, a three-day exhibition bringing together Dubai’s leading real estate developers, financiers, investors and construction experts.
This is great news for prospective investors, showing the confidence developers have for buying appetite. However, Ivana Vucinic of Chestertons Mena has advised for investors to act relatively quickly before the boom inflates buying costs. She expects prices and rents to remain fairly flat until the year end.
You can find out more about our investment opportunities in Dubai here, or contact us for a chat.
For more reasons to invest in Dubai, take a look at how Dubai’s rental yields are higher than London, Singapore and Hong Kong.