According to DLD, real estate transactions in Dubai reached an impressive AED 111 billion in the first half of 2018 through more than 27,000 transactions, reaffirming the market’s competitiveness despite the recent economic slowdown.
An increase in the transaction rate
What are foreign investors looking for in Dubai properties nowadays? Is it the views, the completion dates (before Expo2020 for example), the accessibility, or other aspects?
There are three types of Foreign investors: the first one is looking for a return on their investment with a high rental yield, the second is focused on long-term capital appreciation on the asset and the final one is looking to settle in Dubai in the future, therefore, it becomes more of lifestyle investment decision. All three Investors have become much more astute now especially with new technological developments and greater transparency of information through the property portals and social media platforms. The main criteria that these foreign investors look for are Location, master development infrastructure, accessibility to amenities such as malls and beaches and the close proximity to transport links such as metros.
A Metropolitan Lookdown
With the third type of investor we see that they are more willing to pay a higher premium for better views such as sea view, as its much more of an emotional decision than solely an investment decision. Also, they are willing to wait for a longer completion date as they don’t have any urgent need to relocate and consider Dubai as a potential destination in their later years of life. That is why the new law of providing a 5 years retirement visa is great for the property market and should provide new momentum of demand into the Dubai real estate market.
What type of returns are investors favoring lately- rental yields or capital appreciation and why?
Investors are lately favoring higher rental yields with 8% and above, which is above the international average. The reason for this is to mitigate the risks if rentals continue to fall due to the excess supply entering the market.
Which projects are especially popular with overseas buyers? And which unit types?
Overseas buyers generally prefer purchasing with the top master developers such as Emaar, Meraas and Dubai Properties as they provide a strong master community development and have a great reputation in the market. Also, they have much more flexibility in providing international investors with incentives such as post-payment plans and waiver of DLD registration fees, which many private developers can’t afford to do.
Developments such as Dubai Hills and the Creek project have been very popular and units with golf course views or creek/sea views are generally what international investors prefer.
As far as you know, which nationalities have invested the most in Dubai properties over the last 12 months?
Dubai attracts a real mix of nationalities as it’s a unique destination. It offers a diverse portfolio of properties and is backed by the Real Estate Regulatory Authority and the DLD to provide a transparent regulatory framework that protects the interest of investors. Recently we have seen an upsurge in Chinese, Indians and Uk investors into the market. The reason for this is due to Dubai being 25 percent more affordable compared to similar options in their home countries. The fantastic value offering regarding pricing and yields are the main unique selling points for Dubai properties.