The United Arab Emirates is, today, a very stable country
Stability is a necessary condition when investing in real estate because it is crucial for long-term growth and profitability.
You are probably already familiar with the fact that the UAE is known for its strong stability.
The Fragile State Index reported for this country in 2024 is 34.7, which is an excellent number (USA 44.9).
The United Arab Emirates has strong economic foundations due to its large oil reserves, and the government has invested heavily in infrastructure and social services, making it a relatively prosperous and stable nation.
Also, the country maintain good relations with its neighbors, allowing it to remain secure and peaceful.
The United Arab Emirates will keep growing in the next 5 years
Before buying real estate abroad, it is essential to ensure the economic situation of the country.
As projected by the IMF, the UAE has ended 2023 with a growth rate of 3.5%.
For 2024, estimation is 3.9%.
And it will keep growing since economy is expected to increase by 17.6% during the next 5 years, resulting in an average GDP growth rate of 3.5%.
The expected sustainable growth rate provides a good opportunity to benefit from the appreciation of real estate values in the country.
This growth rate ensures that the value of investments will remain stable over the long term.
The United Arab Emirates' population is growing and getting richer
Population growth and Gross Domestic Product per person should be on your mind when you're in the market for real estate because:
- a growing population means more people needing homes
- a higher GDP means people have more money to spend on housing (which lead to increase property value over time)
In the UAE, the average GDP per capita has changed by 3.8% over the last 5 years.
The Emirati population is growing (+8% in 5 years).
This means that, if you purchase a villa in Dubai and rent it out, you'll attract more tenants with sufficient funds to cover the rent each year.
Rental yields are extremely high in the UAE
To understand if a property investment can be financially rewarding, consider the rental yields.
It's the annual rental income of a property divided by its price.
For example, if a property in Dubai is purchased for 1.500.000 AED (+/- 375K EUR) and generates 120.000 AED (+/- 30K EUR) in annual rental income, the rental yield would be 8%.
According to experts, rental properties in Dubai offer rental yields ranging from 8.2% and 14.9%.
In the UAE, expect moderate inflationary effect
Inflation is the overall increase in the cost of living.
It's when your usual taxi ride in Dubai costs 30 AED instead of 25 AED a couple of years ago.
If you're contemplating investing in a property, high inflation can offer several advantages:
- property values have a tendency to increase over time, leading to capital appreciation
- inflation can result in higher rental rates, increasing the cash flow from the property
- inflation reduces the real value of debt, making mortgage payments more affordable
Real estate act as a hedge against inflation, effectively preserving the value of the investment.
Diversifying into real estate provides stability during inflationary periods.
Based on IMF, during the next 5 years, UAE will support a 10.8% inflation rate, giving us a 2.2% average yearly increase.
This data is telling us that Dubai could face inflation in the near future, which would lead to an increase in prices.
Consequently, purchasing a property could become more expensive.
But if you buy now, your investment will appreciate, allowing you to sell it at a higher value in the future.
Is it a good time to buy real estate in the UAE then?
Purchasing properties in Dubai present a compelling opportunity, driven by a combination of favorable factors.
The UAE stands out as an exceptionally stable country, providing a secure environment for property investment. This stability minimizes risks and contributes to a favorable investment climate, increasing confidence in the real estate market.
The UAE's robust economic growth forecasts for the next years reinforce its attractiveness as a property investment destination.
The anticipated expansion of the economy suggests potential for property values to appreciate, offering capital gains over time.
The UAE's growing population, accompanied by an incremental improvement in wealth, can drive demand for housing and real estate, leading to increased property values.
One of the standout advantages for property investors in Dubai is the extremely high rental yields.
The combination of demand for rental properties and the relatively high cost of living makes rental income a lucrative avenue.
This can result in a steady stream of income, enhancing the overall appeal of property investment in the region.
Amid these positive indicators, it's worth nothing that moderate inflationary effects are expected in the UAE.
While inflation can impact purchasing power, the country's stable economic growth, growing population, and high rental yields could counterbalance this effect, safeguarding the value of your property investments.
In conclusion, property investment in Dubai hold promise, with its stability, growth prospects, rising population, and exceptional rental yields.
Economic growth
Dubai has experienced solid economic growth for many years, resulting in a vibrant and expanding real estate market. Investments in real estate can generate attractive returns in the long term.
Real estate market in demand
Dubai attracts many investors and expatriates, which creates a sustained demand for real estate. This means you can easily find tenants and maintain a high occupancy rate, ensuring a regular income.
Tax advantages
Dubai offers an advantageous tax system, with low or no tax rates for certain sectors. This helps maximize returns and reduce the tax burden on real estate investments.
Political stability
Dubai benefits from political stability and a secure environment, which reassures investors. Local authorities have implemented policies favorable to foreign investment, making it easier to acquire and own real estate.
Portfolio diversity
Investing in real estate in Dubai allows you to diversify your investment portfolio. Real estate is considered a tangible asset and can provide additional stability to your portfolio, particularly during periods of financial market volatility.
Profits potentiality
Dubai is a market where property prices tend to increase over time. By investing in real estate in Dubai, you can benefit from an appreciation in the value of your property, which can allow you to realize significant capital gains on resale.
HOW IT WORKS ?
To begin, you must define the nature of your investment:
Rental investment
Purchase of primary or secondary residence
Purchase–resale operation
Then, decide on the type of property you are looking for according to its location, its volume and its composition (number of bedrooms, bathrooms, etc.).
Whether it is a rental purpose or a purchase–sale procedure, our team will give you the best advices to select the most interesting type of properties.
You will also need to define your overall investment budget, the amount of your contribution and your monthly repayment capacity as well as the repayment duration.
For each property, you will receive complete informative documents:
- Residence’s folder
- Commercial offer with property’s plans and payment’s plan
- Pictures and videos of the residence and the surrounding areas
- Precise residences’s location
- A presentation video from the promoter
We can send you these elements by Email, WhatsApp, Telegram, etc. at your best convenience
If you are in Dubai, we will be happy to accompany you to the construction sites.
Developers also provide show apartments that you will visit.
If a property interests you and it is still available, you must then proceed with its reservation.
This process can easily be done from abroad: quickly, simply and securely.
You will need to provide the required documents:
Address
E-mail address
Phone number
Copy of your passport (valid)
If the purchase is made by several people, these elements are necessary for all buyers.
As part of an off–plan purchase, developers systematically offer payment plans which allow you to pay in several installments over a period determined in advance.
As part of a payment plan, the first downpayment is generally 20% of the total value of the property.
You must also add the amount of Dubai Land Department fees (equivalent to Notary fees) and administrative fees (often 4%).
This payment can be made by credit card, bank transfer, in cash and sometimes in cryptocurrencies.
It is now time to sign your SPA (Sales Purchase Agreement), the terms and compliance of which have been validated by the Dubai Land Department.
Two copies must be signed, physically or digitally.
If the promoter requires a physical signature, he will send you the contracts to the address of your choice, you will then have to return the two signed copies.
Once the signed copies are received, the developer can register the sale with the Dubai Land Department.
You will then receive your provisional title deed (Oqood) directly by email, sent by the Dubai Land Department.
Once your provisional title has been obtained and after having paid the equivalent of 40% of the property’s value, you are authorized to resell the property and already benefit from a capital gain.
Finally, you will receive your final and official “Title Deed” once you have paid for the property in full and it has been delivered to you.
Regulations and purchasing processes
While purchasing real estate in Belgium can be complex due to numerous regulations, in Dubai the process is much simpler and faster. The Emirate has put in place a flexible and accessible system to facilitate the acquisition of property.
Steps to buy property in Dubai
–Find an investment:
Consult our PROPERTIES page where you will find detailed descriptions of the accommodation, their location, the amenities, as well as brochures and plans provided by the developers.
–Booking :
To take action, simply pay the first installment to reserve the property and provide the necessary documents (copy of passport, email and postal addresses, telephone number).
–Respect the payment plan:
You must follow the payment deadlines announced by the real estate developer responsible for the construction and sale of the project.
The money is transferred to an account of the Dubai Land Department, the body responsible for regulating Dubai’s real estate market.
Once full payment is made, the property is constructed and the keys are collected, the Dubai Land Department transfers the funds to the property developer.
Finance your purchase with a bank
You can finance part of your property purchase in Dubai with the help of a bank. This practice is becoming more and more common.
Some banks can lend you up to 50% of the value of the property.
-Conditions :
Be at least 21 years old
A loan with a maximum duration of 25 years
Proof of a monthly income of at least 3.5K EUR
-Documents to provide to the bank:
Copy of your passport and identity card
Copies of your last six salary statements (6 months)
Copy of your last warning extract from the roll (imposition)
Proof of address
Impact of sight
The importance of sight is a crucial element to emphasize.
In Dubai, it can be the determining factor for the sale or rental of real estate.
The city is renowned for its spectacular panoramas, offering views of the sea, the desert or the urban skyline.
These prospects increase the attractiveness of properties and directly influence their value.
View and real estate value
View and property value are central aspects of the Dubai real estate market.
Panoramic views of the sea, the city and its modern urban landscapes have a significant impact on property prices.
They confer a feeling of luxury and prestige, making housing more attractive.
Key factors to consider
When purchasing a property in Dubai, two main factors must be taken into account: the view and the location.
Location: It determines the view and therefore the value of the property.
Coastal neighborhoods and high-rise developments offer exceptional, often highly sought-after views.
These features strongly influence the value of a property, highlighting the importance of choosing a location with a remarkable view to maximize the property’s appeal and value.
Property Insurance in the UAE
Property insurance in the UAE offers vital protection against various risks, such as fire, water damage, and natural disasters.
The importance of home insurance has significantly increased when buying or renting properties in Dubai. Homes are susceptible to damages and problems caused by internal or external factors, as well as the effects of time and long-term use of facilities and parts.
This underscores the necessity of home insurance to repair such damages without incurring hefty expenses, thereby increasing the property’s lifespan and facilitating comfortable living for its occupants.
Coverage for Personal Property and Homes
Property insurance provides coverage for both personal property and homes, including internal and external damages to the building. It also covers loss or damage to personal property due to fire, water, natural disasters, and more. To obtain home insurance in the UAE, one can contract any of the concerned companies.
Investment Protection
Insurance offers financial protection against potential losses, ensuring the safety of real estate investments and encouraging further investment in this sector without concerns.
Coverage for Natural Damage
Insurance protects property owners against legal claims resulting from injuries or damages that may occur to others within the property.
Protection from Vandalism
Property insurance extends to include coverage against theft, intrusion, and vandalism. It provides necessary funds to compensate the affected party for these potential acts.
Legal Liability Coverage
Insurance protects property owners against legal claims resulting from injuries or damages that may occur to others within the property.
Enhancing Property Value
Insurance helps maintain market value by preserving the property’s safety and readiness, thus increasing the chances of reselling it at a good price.
Supporting Repair Operations
Insurance covers the costs of repair or reconstruction after damage, ensuring quick resolution without waiting for the owner to gather necessary funds, as insurance companies fund these damages.
Requirement for Real Estate Financing
Banks and financing institutions often require property insurance as a condition for providing real estate loans. This protects against potential damages that may affect the property.
Financial Stability for Property Owners
Insurance ensures the financial stability of property owners in case of any damage or loss. It helps achieve long-term financial sustainability for real estate projects by reducing the financial risks associated with property ownership.
Property insurance is a vital investment for property owners in the UAE, providing comprehensive coverage against a wide range of risks and ensuring peace of mind for homeowners and investors alike.
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