Leading nations keep investing in Dubai real estate as Expo boosts sentiments; Israeli investors foray into the market this year and may join top-10 club with significant investments

Global investors flock to invest in Dubai real estate market as it offers good infrastructure, tax-free status, new visa options and 100 per cent foreign ownership possibilities, experts say.

Latest data indicated that Israeli investors foray into the market this year and may join top-10 club with significant investments while subcontinent businessmen will continue to pour money into Dubai real estate to hold top positions in the ranking, according to Zoom Property Insights.

“With a strong recovery on cards in 2021, the third quarter of the year recorded the highest-ever sales transactions since 2009 with 15,926 deals worth Dh42.35 billion. By the end of July-September 2021 quarter, about 43,299 transactions amounting to Dh104.3 billion have been recorded. The fourth quarter is expected to produce even better results as Expo 2020 Dubai is receiving great footfalls,” according to Zoom Property Insights.

The real estate portal said troupe of foreign investors was led by the subcontinent as Indians and Pakistanis, who make up for 20 to 30 per cent of total investors in the Dubai real estate sector, continued to pour money in growing market of the region.

“Israeli investors have also ventured into the market this year with significant investments. They are likely to emerge in top 10 lists of nations investing in Dubai real estate this year,” according to Zoom Property Insights.

Analysts and real estate experts said visa reforms, successful pandemic management, and vaccination drive are among the top reasons that supported the return of foreign investors in 2021.

Ata Shobeiry, CEO at Zoom Property, said the last few years have seen huge amounts of investment by foreigners in Dubai.

“While India, Pakistan, and the UK are old players in the property market, new investors from Israel have joined the list of foreign investors in Dubai. Going by these trends, the coming years will also see more investment from foreign investors in the emirate,” he said.

“Apart from a stable economy, expat-friendly policies, efficient handling of the pandemic, a secure investment environment, and visa reforms are some of the major reasons why foreign investors are attracted to Dubai. Expo 2020 impact on economy and real estate will also reflect in numbers by second quarter of next year,” Shobeiry said.

Top investors in Dubai real estate

Statistics obtained from DLD reports show that India, Pakistan, the UK, Saudi Arabia, and China are among the top countries that invest in the Dubai property market.

During 2020, when the Covid-19 was at its peak, the Dubai property market still showed resilience and attracted foreign investment. Indian investors topped the charts, while Chinese, British, Pakistani and French investors also occupied leading spots. Among GCC countries, Saudi Arabia, Kuwait, Oman and Bahrain remained at the forefront.

The year 2019 also saw the supremacy of Indian, Saudi Arabian, Chinese, and British investors in the real estate sector. Investors belonging to Pakistan, Egypt, Jordan, and Canada also made noteworthy investments in the market.

“The market is stable and it has a promising outlook due to growing demand from subcontinent investors and new entrants from US, UK, Europe and South American countries,” according to Zoom Property Insights.

Dubai appeals growing

Nikita Kuznetsov, CEO of Metropolitan Premium Properties, said investors like Dubai because it’s considered a very attractive city to invest in, especially for prime locations. He said prices per square foot are lower than other international cities and investors can also achieve, on average, between five per cent to 10 per cent higher rental yields than other more established markets.

He said Dubai has some of the most luxurious properties in the world and the city continues to offer its residents an unmatched lifestyle. The city has all the right ingredients to attract property buyers and has emerged as one of the safest and more open destination in the world.

“We recently sold a penthouse at the Atlantis The Royal Resort & Residences for Dh64 million making it one of the most expensive properties sold in Dubai this year. The four-bed 8,300sqft penthouse is the second most expensive property in the development after the top-floor five-bed penthouse triplex, which is also listed by us, selling for Dh180,000,000 ($49 million),” Kuznetsov told Khaleej Times on Saturday.

He said the people who are buying are choosing Dubai due to the high levels of safety and security the country offers, especially for high-net-worth individuals. Other key deciding factors include international schools, good infrastructure, tax-free status, new visa options and 100 per cent foreign ownership possibilities,” he said.

“We have seen a lot of our HNW clients relocate or invest in Dubai due to the positive steps taken by the government around the Covid-19 pandemic. Close to 90 per cent of the Dubai population is now vaccinated which sends a really positive message to the outside world of safety and security. This has definitely given residents and investors’ confidence in the real estate market,” he said.

“From our clients, we are seeing that 70 per cent are purchasing for secondary homes and 30 per cent for investment purposes. From our overseas customers, 30 per cent are from the CIS, 30 per cent from European countries, 20 per cent from the GCC and 20 per cent from the rest of the world,” he added.

To a question, he said there is a spike in the number of transactions for villas and townhouses, with a notable interest and high demand for waterfront/shoreline property.

“These are two segments that are very much in demand right now. Seafront properties are seen as secondary residences and investments whereas townhouses and villas are popular with Dubai residents who are looking for a forever home.

“We anticipate Dubai’s real estate prices to go up between 10-15% in 2022 and demand to increase as developers announce new projects,” he added.

Subcontinent investors hold the key

Yousuf Fakhruddin, CEO, Fakhruddin Properties, said property prices in Dubai have picked up since travel restrictions were eased before Expo 2020 and flights resumed. He said the final quarter of the year saw many an investor from the subcontinent investing money into the emirate’s real estate market and everyone in the industry is hopeful of this trend continuing for some time.

“Dubai’s close proximity and geographic location, and the international standards of living have encouraged a number of investors across the subcontinent to choose Dubai as their home or place of investment,” Fakhruddin told Khaleej Times on Saturday.

“Subcontinent investors consider the emirate to be a relatively safe haven for their investments. It is a safe space otherwise, too - Dubai ranks no. 1 in women safety and continually achieved a low crime rate despite being a metropolitan city – a big factor for those investing in properties in the region that continues to keep them interested,” he said.

Elaborating, he said subcontinent investors form a substantial part of the total real estate investors in Dubai as they contribute to almost a third of the accumulated investment in Dubai’s real estate during 2021 so far.

“There are various reasons behind their decision and sentiment to continue to invest in the UAE. This country is able to provide them with a flavour of their culture blended perfectly with global lifestyle standards. Some long-term UAE residents and people of importance have secured golden visas and silver visas, leading to them preferring to own a property as opposed to staying in a rented accommodation,” he said.

Fakhruddin said the new set of reforms around visas and reduction in restrictions in the form of retirement visas and freelance visas are also encouraging people from all across the subcontinent to come, stay, and settle in Dubai. An additional factor is that Dubai is just a short flight away from most countries in the subcontinent, making access to their home countries much easier.

Moreover, as far as Indian and Pakistanis are concerned, both countries share deep-rooted bilateral relations with the UAE, resulting in both the nationalities feeling very much at home here.

“The surge in the number of Indian and Pakistani property buyers since air travel with both their countries was resumed in August is pretty evident and will continue in this direction,” he said.