Dubai real estate
After oil was discovered in Dubai in 1966, the Sheikh began developing the city into the metropolis it is today. There was no shortage of room for growth, nor were financial resources no longer a problem for the grand plans the Sheikh had. With the discovery of oil, more and more businesses and expats were flocking to the city, which greatly helped Dubai's rapid growth. Building more and more, bigger and better architectural wonders also made the city more attractive to tourists who wanted to experience the wonders of Dubai. Dubai cleverly set out to attract businesses, investors and tourists in recent years and Dubai continues to do so.
Investors and Expats
Investors are attracted by getting good deals with often favorable payment terms for paying the purchase price. Also, the growing number of expats living/working in the city makes it very interesting for investors to invest in Dubai. This group ensures a continuous increase in value and huge demand for the property. This large number of expats is due to Dubai's favorable tax rules, because more and more companies want to physically settle in Dubai. Besides the 5% VAT and 9% profit tax, Dubai has a 0% tax rate on income, which means that Dubai is very attractive for both companies and their employees. But setting up a company in Dubai is very complex and currently there is a huge queue, so make sure you have a good network of people who can support you.
Tourism
Starting in the 1990s, Dubai also started to focus heavily on tourism. Due to its favorable and warm desert climate, Dubai is a good vacation destination for sun lovers 9 out of 12 months a year. The other 3 months are very hot summer months, during which it can reach 50 degrees just like that. But tourists are not only attracted by the beautiful weather and the white sandy beaches, also the architectural wonders that have been built, the skyline and the large amount of facilities and activities that Dubai offers, such as amusement parks, aquariums, museums and so on make Dubai very much in demand by tourists.
The demand for real estate in Dubai is substantially higher than the supply, this applies to both existing construction, new construction and the rental market.
(Off-Plan)
One of the main reasons Dubai has been able to grow so much in recent years comes from the fact that almost all new construction projects sold out quickly. Investors who noticed the future plans for Dubai and contrasted that with the then extremely low m2 prices made the choice to invest in Dubai. As more and more companies relocated to Dubai with its employees, the demand for real estate grew. As long as demand exceeds supply, the city can continue to grow. But why is the demand for new construction in Dubai higher than the supply?
In Dubai, new construction is marketed very smartly. The m2 prices of new construction projects are lower than the m2 prices of existing construction. As the new construction project moves toward completion, the value creeps more toward that of existing construction. This makes new construction a very interesting option for investors.
Ready built
Existing construction is also doing very well in Dubai, this is due to the fact that the demand for rental housing from expats and tourists is very high. Investors are therefore betting not only on indirect returns (increase in value) but also on direct returns (rental income). There is also a large group of people who would like to have a vacation home to stay here in the winter or during vacations.
Rental market
Like new construction and existing construction, the rental market is doing very well. The growing number of tourists and the growing number of companies wishing to establish themselves in Dubai, which bring expats with them, mean that the demand for rental properties in Dubai is increasing.
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