WHY DUBAI

Explore Dubai

When selecting destinations for relocation or investment, it's important to have a clear set of priorities and fundamental criteria for identifying lucrative locations. In this article, we've highlighted several examples and recommended examining the habits of the world's wealthiest individuals. After all, if they've built vast fortunes, they must know something—so why not benefit from their insights?

Content:

  • The expansion of tourism and the arrival of affluent residents
  • Numerous factors draw millionaires to the UAE.
  • For potential investors
  • Why Consider Investing in Real Estate?
  • Why is a reliable agent essential?
  • Why make a purchase now?

The expansion of tourism and the arrival of affluent residents

Dubai consistently ranks as one of the most appealing cities globally. According to Euromonitor International, a global research firm, the city leads in tourist and excursion arrivals, attracting 16.8 million visitors.

In December 2023, Dubai's hotels saw record occupancy rates, significantly boosting their revenues. CoStar Group reports that the average daily room rate (ADR) for the month reached its highest level ever.

In 2023, 4,500 millionaires relocated to the United Arab Emirates, according to Henley & Partners, cementing the country's reputation as a hub for wealthy individuals worldwide. In the capital migration ranking, the UAE ranked second, following Australia, which saw 5,200 millionaires move there.

"Statistics on high-net-worth individual migration speak volumes. Affluent families are highly mobile, and their movements across borders can provide early signals of a country's economic health and future trends. Like the canary in the coal mine, they alert us to potential dangers, as they are more sensitive to threats to their wealth and usually have the means to take corrective actions to safeguard their legacies."

— Dr. Juerg Steffen, CEO of Henley & Partners, the global leader in capital migration studies.

Numerous factors draw millionaires to the UAE.

Security: A critical consideration, especially in uncertain times, which is why a significant amount of private capital is invested in the UAE. Dubai provides a stable regulatory framework: the country upholds the rule of law and ensures economic freedom.

Taxes: Dubai is one of the most popular foreign markets right now for a variety of reasons. There is no real estate tax, capital gains tax, or income tax—appealing to many buyers, especially those from the United States.

Healthcare: The UAE is renowned for its world-class medical facilities, drawing many international patients seeking top-quality care.

Luxury and Entertainment: The UAE offers a diverse range of entertainment options, from high-end shopping malls and restaurants to premium real estate and exclusive communities.

Education: The UAE is home to over 200 international schools, offering excellent educational opportunities for the children of wealthy families.

Resort Lifestyle: With its beautiful beaches, waterparks, and marinas, the UAE is a year-round destination for relaxation and recreation.

For potential investors

While Dubai is often associated with oil revenues, its primary sources of income are actually tourism and real estate. According to UBS analysts in the UBS Global Real Estate Bubble report, the city's real estate market is considered "not overvalued," with its true value significantly surpassing the current market prices, suggesting that Dubai is shielded from a real estate bubble.

An index value above one signals the potential for a market bubble. If the index approaches 1.5, it indicates an imminent risk of a collapse, which would result in a decline in real estate prices and demand, potentially leading to investor losses.

The UBS report indicates that there is no risk of a real estate bubble forming in Dubai. The emirate's housing market remains highly promising, ranking 23rd with an index score of 0.14—one of the lowest risk levels.

Dubai is expected to experience steady growth over the next 5-10 years. The recent 25% increase in rental prices in certain areas of the city reflects genuine demand. Alongside these positive trends, several factors contribute to strong confidence in the relative safety of investments in the market.

Why Consider Investing in Real Estate?

Capital Preservation: Choosing a reliable property helps protect your capital from inflation while potentially increasing its value. For instance, if you have $1,000,000 in cash and inflation is 5% annually, with real estate prices growing at 7% per year, your real economic return would be a 2% capital growth annually. Therefore, investing in real estate not only safeguards your funds during inflation but also enables them to grow in the future.

High Profitability: The demand for real estate in Dubai continues to rise, reaching new record highs. In August, 12,000 transactions were completed, marking a 23.7% increase compared to the previous year. Market activity remains strong despite the growing supply. This year, local authorities have supported several coastal projects that were previously inactive or on hold, including the revival of Palm Jebel Ali, which has been dormant for over a decade. The government announced the project's relaunch in 2023, with expectations that it will show even greater value growth than Palm Jumeirah—projected at 45-60%. The demand for the new island is so high that the initial sales event saw overwhelming buyer interest.

Passive Income: Real estate is a truly passive and dependable source of income. According to UBS, rental prices have risen by 50% compared to the previous two years, highlighting the growth potential in this sector.

Why is a reliable agent essential?

When searching for an investment opportunity, enlisting the help of an agent is essential. An experienced professional will save you valuable time, offer expert advice on the best real estate options, and grant you access to an extensive property database. When buying properties through a real estate agent, you typically pay 0% commission, as the developer covers the agent's fee. However, for properties in the secondary market, the agent’s commission is usually 2%, but their expertise is crucial for completing the transaction.

Here’s how an agent can assist you:

Help select the best real estate options; Ensure reliable money transfers; Guide you through document collection and power of attorney preparation; Assist in establishing a legal entity if the property purchase is for a company; Aid in securing a resident visa; Open a bank account if required; Assist in obtaining the keys to your property; Manage your property on your behalf; Provide after-sales service.

Why make a purchase now?

Many are waiting for a market correction, believing the real estate boom will end in the next two to three years. Some investors have been anticipating this since the pandemic and have missed out on significant opportunities, while others have profited well. Although the market has been rising recently, this doesn't necessarily mean that prices will return to previous levels in the near future. Property prices in Dubai are increasing steadily due to real, sustainable factors: the population is growing each year (a record 3% in 2023), there's a large migration of millionaires, and the westernization of culture. According to the Emirate’s Master Plan, by 2040, the population could reach 7.8 million, living in comfortable conditions, with Dubai positioned as the world’s best city to live in.

These undeniable factors make it highly unlikely that prices will ever return to previous levels, even with occasional fluctuations. This is supported not only by expert opinions from reputable organizations but also by tangible facts and the experiences of our clients.