Before investing in real estate, everyone thinks for what purpose he does it. Many want to ensure a comfortable old age, because real estate investments are distinguished by their reliability; others want to earn extra income or simply increase their own savings. Only having decided on the purpose of investing funds, we can choose the right place for this and develop a further strategy. So why do you need real estate in Dubai? Really, why? Let's try to give only a few options for what an apartment or villa in Dubai can be useful for.
Real estate in Dubai as a profitable investment ...
Despite the fact that the echoes of the global economic crisis are still heard all over the world, there is a revival in the Dubai real estate market. Recently, real estate prices and rental rates have been rising and are closely approaching pre-crisis values. According to estimates by the global consulting company Jones Lang LaSalle, as of 2012, villa prices increased by 23% compared to the same period last year and were 14% higher than the level of the beginning of 2008. Apartment prices so far are growing more slowly (over the same period - by 4%) and remain 18% below their maximum values, which took place in the third quarter of 2008. As for the cost of rental housing, it is growing in annual terms on average by 5-7% in both segments.
In addition, until recently, no new real estate projects were launched in Dubai, but old ones, which had begun before the crisis, were only being completed. This means that in the next few years the supply of new housing will be noticeably limited, while the demand for the purchase and rental of real estate, due to the growth of the Dubai economy and business activity in the Gulf countries, is expected to grow.
However, despite the increase in prices, it is quite possible to acquire quality real estate in Dubai at an affordable price. For the same money, for which you can buy a small apartment in Moscow, in Dubai you can buy spacious apartments with all the amenities and the opportunity to visit the sea every day.
The UAE differs from many countries in that you do not have to pay any taxes for real estate ownership. At the same time, laws regarding the purchase of real estate in the UAE by foreigners are extremely transparent. Citizens of foreign states who are not members of the Arab Gulf Cooperation Council are entitled to acquire full ownership of property in Dubai. True, in specially designated territories, in the so-called freehold zones. The list of such zones is established by Decree of the ruler of Dubai No. 3 of 2006.
These include almost the entire territory of "new Dubai", including such popular areas as Dubai Marina, The Palm Jumeirah, Emirates Living, Jumeirah Lakes Towers, Downtown Dubai and others. As a rule, the purchase of an apartment or villa is carried out through real estate agencies that take care of all legal formalities.
Of all the seven emirates that make up the UAE, Dubai has the most developed and transparent legislative base in real estate. Registration of real estate transactions is carried out at the time of the contact of the contracting parties, after which the buyer is issued a registration certificate certifying his ownership of the acquired property.
This registration procedure maximally simplifies the process of buying and selling real estate and minimizes possible risks from both the seller and the buyer. Compliance with the law is exercised by the Dubai Real Estate Market Regulatory Agency (RERA). It, in particular, is responsible for the registration of real estate projects, as well as for the mandatory registration of developers, real estate agencies and the agents themselves. The activities of RERA are primarily aimed at protecting the rights and interests of buyers and sellers and is designed to minimize the possibility of fraud on the part of agents.
... and as an additional source of income
If you are not going to live in the property you purchased in Dubai, you can rent it out and receive additional income for it.
At the same time, from the income received, you again do not officially need to pay any taxes.
The demand for rental housing in Dubai is great. ETS is not surprising - after all, more than 90% of the two million inhabitants of the metropolis are visitors, the so-called expatriates. Most of them are not going to acquire their own housing in Dubai, but all of them need to live, work and relax somewhere. Therefore, the rental market here is very developed, and real estate, especially residential, brings a high current rental income - much higher than similar real estate in Russia or Western Europe.
If we talk about average market values, for housing in Dubai today, the annual net income from long-term rental (that is, income minus the cost of servicing real estate) is on average 5-10% of its value. The spread in profitability is due to differences in the type and category of real estate, its location and cost of services. Moreover, more expensive exclusive real estate, as a rule, gives less return in the form of rental income than mass housing in affordable projects.
When renting a home, you, as the owner, will have the costs of maintaining the building and the surrounding area: the protection of the building, cleaning and improvement of the common territory (parking, pool), garbage disposal, and so on. Typically, such payments are charged annually and range from $ 20 to $ 80 per square meter, depending on the type of property. Temporary residents will pay for light and water, and if it comes to a villa or townhouse, then they will also pay for watering the lawn, but not for maintenance and improvement of the territory of the residential complex.
Renting Dubai is safe. Having entrusted the business to the real estate agency, its owner can be located anywhere in the world, while the agency will pay the costs of maintaining the property on behalf of the owner, charge a fee to tenants, conclude lease agreements and so on.
It should be noted that the local currency exchange rate - the UAE dirham - is tightly tied to the US dollar and is at about 3.67 dirhams per 1 dollar, which means that rental income will be stable and you won’t have to follow the fluctuations of exchange rates.
Or like seasonal housing
If you are going to buy property in Dubai, then, of course, you know that this is not only one of the safest cities in the world, but also a developed tourist and business center that provides its residents with entertainment for every taste, as well as, of course, the warm sea, temperature in which the practical year-round does not fall below +25 degrees. Dubai is also attractive because most of its inhabitants are foreigners. People from all over the world live here, and this cosmopolitanism does not allow any of the visitors to feel like a stranger.
It is not surprising that many of those who buy an apartment or villa in Dubai want to use their purchase as a distant summer residence, where you can come on vacation. You can entrust the management of your property in your absence to a real estate agency. It will deal with all issues related to your property, including cleaning in the apartment.
Moreover, having housing in Dubai, in which you periodically relax, you can receive additional income by renting it for the duration of your absence. Short-term rental housing will cover the costs of its maintenance, which must be paid by the owner. Moreover, you don’t have to do cleaning and other household chores - all questions for you will be settled by a real estate agency. Such a lease, which the real estate agency will deal with on your behalf, is even more profitable than the usual long-term lease (net income can reach 10-15% per year of the value of the property).
Or for permanent residence
In Dubai it is convenient not only to relax, but also to conduct business. This city claims to be the largest business center in the Middle East. For those who want to do business, there are, for example, numerous free economic zones in which you will be helped with obtaining visas and obtaining licenses, as well as the regional headquarters of leading world companies in various fields from oil to information technologies.
It takes only five hours to fly to Dubai from Moscow, and from Dubai you can easily reach any corner of the globe, because it is the largest transit center located at the intersection of air and sea routes between Europe, Africa and Asia. In addition to the existing Dubai International Airport, which is already struggling to cope with such a volume of passengers, a new Al Maktoum International Airport has been built, which, after full commissioning, should become the largest in the world.
Many people call Dubai "the city of the future", because it is amazing how a modern metropolis with a developed network of roads, shopping centers, which have everything, even ski slopes, water parks and a completely "space" metro, so quickly and rapidly grew on the desert site. World-famous sports competitions and international exhibitions are regularly held here, popular world artists come to perform. It is no coincidence that according to Master Card, Dubai in 2012 became the eighth of the most visited cities in the world, beating New York, Barcelona and Rome.
Comment by IMEX Real Estate Executive Director Arthur Kobozev:
Apartment prices in one of the newest areas of Dubai, JLT (Jumeirah Lakes Towers), are much lower than in dilapidated housing on the outskirts of Moscow, and start at about US $ 2-2.5 thousand per square meter. For the money you buy a view from the window of a skyscraper, underground parking, a swimming pool, a gym in the house and a beach in a 15-20 minute walk or ten minutes by car.
Prices for budget apartments right by the sea on the artificial island of The Palm Jumeirah start at US $ 3-3.5 thousand per square meter. Approximately the same prices for apartments in the skyscrapers of Dubai Marina located near the sea - an area that reminds American Manhattan in the number and variety of high-rise buildings. In most houses, along with one- and two-bedroom apartments, there are one-room studios at a more modest price. At the same time, real estate in Dubai is rented out by developers already finished, fully equipped with plumbing and kitchen furniture, and in most projects with built-in appliances.
You can get any additional information about the acquisition and management of your property in Dubai from IMEX Real Estate specialists by phone in Moscow +7 495 5100008, toll-free number in the UAE 800-IMEX (800-4639) or by sending a request by e-mail info @ IMEXre.com.
