Investors from Britain, Pakistan and India continue to head up foreign investment in Dubai’s real estate market. And it’s looking good for the future of the sector, according to industry experts.
Recently released figures by the Dubai Land Department (DLD) show a drop in the number of real estate transactions recorded during Q1 2018. This equates to 13,759 transactions, worth Dh58 billion compared with 20,000 worth Dh77 billion in the comparable period last year.
Attractive ROI
There’s no doubt that Dubai is still one of the most attractive destinations in the world for investors seeking a safe ROI (return on investment). Sultan Butti bin Mejren, the director general of DLD, points towards the strong base of investors in the Emirates property market, who are from 217 different nationalities. He said: “The Dubai real estate market continues to show growth, driven by general optimism and confidence in the real estate sector.”
During Q1 2018, investors from the Gulf Cooperation Council (GCC) were responsible for 2,500 transactions worth Dh6 billion, while other UAE investors fulfilled 1,250 transactions worth more than Dh2 million. Investors from overseas totalled 5,0000 transactions which totals Dh10 billion.
In terms of nationalities, 1,587 transactions worth Dh4 billion were made by 1,264 Emirates investors, followed by 1,550 Indian investments worth Dh3 billion. Saudi Arabian investments came next, and were wroth Dh 1.3 billion, while Britain, China, Egypt, Russia, Jordan and Canada ranked sixth to tenth.
Good Outlook
These results show an upturn in momentum for Dubai’s real estate sector, which should continue for the rest of the year and into 2019. DLD chief Bin Mejren said: “Analysts and experts predict an upsurge as we enter 2019 with unprecedented strength, as many strategic infrastructure projects are due to be completed in Dubai in preparation for Expo 2020.”
Dubai will continue to attract investment, particularly within the mid-market, affordable sector. This is due to the strength of the ROI, which is generally around 15-20% on handover. This affordable sector will continue to encourage more buying and selling activity across Dubai.
Defying The Odds
The DLD’s Q1 2018 report shows that the real estate market is continuing to defy the odds. Dubai will continue to attract increasing amounts of overseas investment thanks to its USPs (unique selling points):
- Higher rental yields leading to higher ROIs.
- Strong connections with the rest of the world.
- Free repatriation of profits and capital.
- Solid regulatory system to protect investment.
- Growth-driven, positive leadership.
Mature Market
As Dubai’s property market continues to mature, we could see the common trend of people shifting from rentals to buying. There are some attractive propositions in Dubai for first-time buyers as well as investors, particularly in communities like Jumeirah Village Circle, Jumeirah Beach Residence and Dubai South, which is expanding quickly ahead of 2020.
International and local investors are showing more confidence in Dubai’s property market and its long-term sustainability. As property developers encounter more and better competition, the result will be more excellent quality properties delivered on time.
Increase In Female Investment
Interestingly, there was a very high level of investment from specifically female investors, with 2,431 making 2,780 investments worth more than Dh4.4 billion.
In terms of investment areas, Business Bay was at number 1 with 973 investments worth around Dh2 billion, with Dubai Marina just behind with 720 worth around Dh1.37 billion.
About Samir Salya
Samir Salya is the Chairman of Reign Holdings and is involved in UK and UAE real estate and construction. Samir holds over 20 years’ experience in executive management, business expansion, performance improvement, sales and marketing.