Dubai Real Estate Market Explained in a Nutshell

10 Reasons to Invest in Real Estate in Dubai

1. 80% of Dubai’s inhabitants are hardworking expats. Generally, expats in Dubai earn more than their counterparts in Europe, and moreover, they pay no income tax. This gives them more financial flexibility for housing expenses, which explains the high rental prices in Dubai.
2. Another factor is that not only foreign investors, but also expats are active on the buyers’ market. This reduces the supply of rental properties and increases scarcity. See the article in the Khaleej Times for more details. This additional demand results in extra value growth in the market for properties to purchase.
3. When it comes to service charges, you get more amenities included in Dubai. Often, there is always at least one free parking space in the parking garage. There’s usually a 24/7 reception, and you can use the swimming pool and fitness facilities. In ultra-luxe expat communities, there may even be padel courts, wellness facilities, indoor and outdoor cinemas, and flexible workspaces with Wi-Fi.
4. In Dubai, you can rent out your property indefinitely through Airbnb and Booking.com. Additionally, when renting out for a fixed term, you often receive a full year’s rent in advance, combined with a three-month deposit. In the Netherlands, short-term rentals are no longer possible or are regulated to a maximum of six weeks per year.
5. In Dubai, the rental market is not regulated. Rental prices are determined by the market. By law, as a landlord, you may increase the rent by 10% if the tenant already has a rental contract. Rents have risen by 30% in the past year.
6. The government aims to grow its population from 3.5 to 5 million inhabitants by 2030. To achieve this growth, new housing is needed.
7. Sales prices set by project developers in Dubai are subject to government regulation (DLD). This ensures a low per-square-meter purchase price for off-plan properties, since you buy directly from the developer.
8. The purchase price is paid in installments during the construction period, often starting with a 20% down payment plus 4% to the DLD. Afterwards, when you receive the keys, you can finance the property.
9. Profit from sales in Dubai is tax-free, which is unique! In the Netherlands, there’s a self-occupancy requirement (5 years). In other European countries, such as Spain, you pay around 20%, and in Portugal 28% tax if you sell within 5 years. Simply put, buying and then reselling in Dubai is very lucrative.
10. When purchasing real estate in Dubai for at least €500,000, you become eligible for a Golden Visa. This offers numerous benefits, including the possibility to open a bank account and take out a mortgage. Additionally, you can obtain health insurance and receive a discount card for purchases in Dubai.