United Arab Emirates
UNITED ARAB EMIRATES
An attractive hub for real estate investors.
Emblematic city of luxury, wealth and elegance: more than 3 million inhabitants make it one of the most popular and populated destinations in the Persian Gulf. Renowned for its record-high skyscrapers, including the imposing and famous Burj Khalifa (830 metres), malls and luxurious luxury hotels, Dubai is surrounded by an exotic and unusual landscape of sand dunes that make it even more elegant and exclusive.
Second Emirate in size, (second only in Abu Dhabi), this city with an enviable connection with the whole world has asserted itself in two decades as one of the world’s major economic and tourist capitals and also as one of the most attractive real estate markets in the world.
The collective imagination, over the years, has cultivated the belief that Dubai is a world dedicated only to the privileged , on the contrary, it is a real possibility for all those who seek important opportunities to achieve their goals.
In November 2013, the UAE won the 2020 World Expo in Dubai.
This will be the first time that a Universal Exhibition will be held in the region that includes the Middle East, North Africa and South Asia (MENASA).
The theme chosen for the Universal Exhibition is "Connecting Minds, Creating the Future" (Connecting minds, creating the future) which echoes the spirit of collaboration and cooperation that has led the UAE to success in exploring new paths of development and innovation. Through this theme, the Dubai Expo will serve as a catalyst, connecting minds from around the world and inspiring participants to mobilize on shared challenges in an unprecedented World Expo.
The tourism industry has not slowed down the pace during these years, because at this exhibition Dubai is expected to attract 25 million visitors, 70% of whom will come from foreign countries. Covering 438 hectares located in the South Dubai district, halfway between Abu Dhabi and Dubai, the area will be served by three international airports, a major road network and an extension of the Dubai metro. With this infrastructure, access to the event and maximizing benefits for participants will be assured.
The heritage will consist in the site itself with its structures and infrastructures on which will be based the development of the entire Dubai-South district. The area will include a state-of-the-art exhibition centre, academic and research institutions and a technology hub.
Obviously, this city offers much more than normal tourist services. Dubai International Airport has become the busiest airport in the world, a dynamic travel platform for companies operating in Asia and the Middle East.
Dubai has the longest computerized metro network in the world, inaugurated by Sheikh Mohammed on 09/09/2009.
It consists of two lines, identified with different colors, for a total length of 74.6 Km, equipped with 49 stations, 11 of which are underground and the others in viaduct.
Dubai’s goal is to be at the forefront of the industry of the global future, and the metro has not only improved the overall profile of Dubai as a magnificent metropolis, business center and luxury destination, but it’s also a wonderful addition to the city’s iconic landmarks.
The launch of the massive mass transport system was in line with Dubai Sovereign Mohammed bin Rashid Al Maktoum’s vision to strengthen the foundations of a green economy and achieve sustainable development by adopting effective and respectful solutions to the environment. This is a high-quality addition to Dubai’s transportation infrastructure and a model for visionary projects with advanced technology.
This project was the first of its kind in the Arab world and among the most advanced in the railway sector.
The main objective of the metro service is to improve mobility within Dubai, especially in tourist areas and business districts, the integration of mass transport modes in the Emirate, provide a safe and regular transit alternative, reduce carbon emissions and improve people’s life experience.
In 2016, the Route 2020 project was approved to extend the Dubai Metro Red Line from Nakheel Harbour and Tower Station to the Expolink Consortium Expo 2020 site.
In addition, Dubai offers many advantages of urban life, such as the world’s largest luxury shopping malls, such as the Dubai Mall, which is home to nearly 1,200 retailers, 200 restaurants and many leisure opportunities, golden beaches and an attractive climate.
FOCUS ON THE DUBAI REAL ESTATE MARKET
Today, Dubai is a destination that attracts the attention not only of foreign investors, but also of foreign markets. Dubai’s real estate market is ranked as one of the most profitable on the international stage. In particular, from 2016 to today, the marked performances are in strong and continuous growth thanks to the combinations of different factors, such as tourism, business and international events (the next Expo 2020, 50° of the United Arab Emirates in 2021 and World Cup of Football in Qatar in 2022).
The reports of the Dubai Land Department (DLD) tell us that in 2017, the total of real estate transactions reached 69,000 for a total value of AED 285 billion, a decisive increase of 14% compared to 2016. What is important is that of the total number of investors, no less than 23,000 are foreign.
The reports also reveal that the areas of the city that saw more investment are Burj Khalifa with 2,008 transactions and AED 7,368 billion generated, Business Bay with 3,753 transactions and 7,115 billion AED invested and Dubai Marina with 3,300 transactions for approximately 3 billion AED invested.
Such results would not have been possible without the government’s firm commitment to always achieve and maintain very high standards of excellence in the country and security in the protection of foreign capital. The Dubai Real Estate has an investor base of over 200 different nationalities.
Residential investments offer excellent rental returns and are in high demand in Dubai.
Few real estate markets in the world can benefit from rental returns and capital gains on real estate like in Dubai and given its strategic geographical position, highly sophisticated infrastructure and cosmopolitan lifestyle, It is not surprising that the city is a magnet for real estate investors.
In Dubai, investors benefit from a protective legal framework and very attractive taxation.
The rent market is in constant effervescence, this is due to the fact that economic growth is causing a strong population growth and a flow of imposing workers and professionals, therefore the demand for real estate is strong, especially for «business» solutions such as studio, 1-Bedroom and 2 bedroom.
Why invest in Dubai?
Investing in real estate in Dubai is today the opportunity to make investments in a highly profitable market with significant growth prospects, fully oriented and open to investors and foreign capital.
The Emirate of Dubai is strategically positioned at the meeting point between Western and Asian markets: within an 8-hour flight radius, it potentially connects 6 billion people by offering investors unique advantages and conditions in the world.
Here are the different reasons that make investing in Dubai a great opportunity today:
1_ A growing economy
The Emirate of Dubai has a unique characteristic within the federation: it is the only one among the 7 Emirates to have 70% of the GDP coming from non-oil sectors.
This means that the economic system depends only to a small extent on market fluctuations in oil prices and is therefore more stable.
With a steady growth economy, according to the IMF, Dubai shows no signs of slowing down. Given the range of factors influencing this development, it follows that the market value of real estate in Dubai is influenced by positive socio-economic variables such as continued migration, labour market expansion, the rapid development of infrastructure, the growth of tourism and the retail sector, which significantly increase the attractiveness and especially the profitability of buildings. In addition, Dubai’s public debt is very low: about 15% of GDP.
2_Located Tourism Sector (Hotels & Hotel Apartments):
Tourism figures in Dubai are clear: the increase has been steady in recent years. The main effect is a high employment rate in the hospital sector, with percentages that far exceed 80% in the luxury category. In anticipation of the growing demand, especially in view of Expo 2020, a year when 25 million additional visitors will flood at the normal entrance of tourists, many construction sites have been opened to build new and imposing hotel structures.
3_ Living and investing in security, another point in favor of Dubai.
Uaes are the second safest country in the world, after Finland, with a crime rate of less than 4%. Also in the real estate market, transactions, capital and investments are guaranteed by government agencies that monitor and regulate the real estate market, almost completely reducing the level of risk for investors.
4_ Rental Yields (rents) among the most profitable in the world, and high liquidity in the real estate market.
The return on real estate investments in small and medium-sized apartments ranges between 5.77% and 7.21%. The Dubai Real Estate is a very liquid market (unlike the sector in general characterized by long sales times and difficulties in transactions caused even bureaucratic delays) and allows to buy different types of real estate at relatively affordable prices compared to other luxury destinations.
This is the result of the commitment of the government and the organizations dedicated to opening up the sector to foreign investors through numerous initiatives that have led to the development of these very advantageous conditions.
5_Easy access to mortgages (financing options)
One of the fundamental aspects that drives investors around the world to invest in real estate in Dubai is the willingness of credit institutions to take out mortgage loans. This is determined both by the high liquidity of the banks, and by the laws that control the protection of credit in the real estate sector. In fact, having access to financing is very simple and especially fast, unlike European countries where the practice is often long and complicated to accomplish.
In particular, banks offer attractive advantages to non-resident foreign investors who intend to buy an investment property or as a secondary residence in the Emirate, among the main:
• Up to 50% of the value of the property
• Easy access to up to AED 1 million loans
Loans with a term not exceeding 25 years
• Competitive interest rates
• Loans to employees and self employed persons
The documents required to start the loan application are simply the application form, passport and bank account.
For the provision of liquidity, real estate may be used as collateral. This means that if you have a property fully paid and not mortgaged, you can take advantage of the various programs of banks and financial institutions of "Home Equity" which allows you to withdraw own funds from your home. The money released can then be used to finance expenses or other investments.
6_ Open-mindedness of government (business-oriented) and world-class infrastructure
Innovative and enterprise-oriented policies and World Class infrastructure complement the opening of markets to foreign capital and investors, The simplified bureaucracy in the public and private sectors plays an essential role in the attractiveness of the Emirate for foreign investors who wish to invest in real estate in Dubai. In addition, the development of World Class infrastructure has further stimulated the establishment of foreign businesses and activities and contributed significantly to the urban expansion of the city.
7_ Investment protection and transparency agencies (RERA and Escrow Account)
The real estate industry in Dubai is governed by a precise and rigorous regulatory system that protects any form of transaction and the contractual relationship between the seller and the buyer.
The government, by developing fast and efficient bureaucratic systems for the control and transparency of real estate operations, is increasingly committed to eliminating all the sector risks that could endanger the market’s solidity but especially its reputation.
That is why two important and fundamental administrative bodies were created in 2008:
The Real Estate Regulatory Agency is responsible for overseeing the real estate activity (it is even possible to view the official progress of each individual project online) and property intermediation. All companies wishing to start a real estate business in Dubai must first obtain the approval of the RERA before submitting their application to the Department of Economic Development of Dubai. Moreover, it records all the real estate agents and verifies the contracts concluded with the buyers. In the event of a dispute, it shall establish a special court.
• ESCROW ACCOUNT
This is a deposit of funds with an independent third party, the asset manager, who retains the amount received by the client until the project is actually completed. Only then, once he has verified that all the contractual deadlines have been met, will he deliver the amount to the seller or, in the event of default or incomplete construction, will he return the amount paid. It is essentially a legal agreement that allows the parties to perform their respective obligations without litigation. The most interesting legislation concerning this figure is that which obliges the constructor to deposit 20% of the value of all the construction work in a escrow account before starting the work and sales.
The guarantees provided by these two bodies, as well as the increase in the real estate tax from 2% to 4% today make Dubai’s real estate sector solid and reliable.
Any disputes are always settled quickly by a dedicated court and the probabilities of non-payment are practically zero: in Dubai, it is not possible not to pay.
The factors that determine today the convenience for investors to invest in Dubai are mostly economic and financial, they are based on markets and transactions. But there is one thing that few people talk about, but that is actually one of the main pillars of the success of the Dubai Real Estate, and that is lifestyle.
Dubai Lifestyle is coveted by people around the world: luxury, amenities, 24-hour services, entertainment, sociality, shopping and attractions, are just a few examples.
Many investors buy real estate units to move or spend a few periods of the year in this oasis of luxury in the desert, thus enjoying a lifestyle of very high level, without criminality.
9_ NO TAX on property, NO TAX on corporate income, NO TAX on personal income, NO TAX on the repatriation of 100% of the invested capital
Needless to say, a major advantage for foreign investors is that in Dubai, the tax burden is zero. This means that there is no tax on individuals or corporations, let alone on returns. In addition, there is no property tax, such as the IMU Italiana or the Property Tax in France or the IBI in Spain.
Investors can repatriate the invested capital without having to pay taxes. This undoubtedly represents a significant competitive advantage over other competing nations in the real estate market.
The only exception is relative since the introduction of 5% VAT from January 2018. However, in the case of Real Estate, value added tax applies only to certain goods for commercial use, while property for residential use is exempt.
10_ Dubai World Expo 2020
Two major real estate consulting companies, JJL and Knight Frank expect a slight drop in prices. However, Moody’s Investor Service said that Dubai’s public spending on infrastructure and the arrival of many foreign investments will support the real estate market abundantly in the coming years.
The interesting part is that the price of rents, for both small and large apartments, will not react to the variations of the values of the buildings, on the contrary they will remain stable by maintaining thus the high yields. All developers (Developer) have recently worked to reduce service costs, reduce maintenance and construction costs.
Finally, and perhaps most importantly, in October 2020, Dubai will host the World Expo, which will not only bring about 25,000,000 visitors to the hotel industry in the first place, But it will also create 227,000 new jobs that will undoubtedly have a very positive impact on the real estate market in general and will exhaust any type of excess supply, while keeping real estate prices away from the risk of devaluation. The event is the main magnet that attracts foreign investment because it comes at a time when Dubai lives a state of prosperity and will only strengthen the well-being and exclusive image of the city itself.
OUR AXIM NETWORK IN DUBAI
Our network of professionals, accompanies you in your real estate projects in the United Arab Emirates, in Dubai, offering luxury Independent villas with lift, swimming pool and private garden, three-floor twin villas with private lift, apartments of different sizes in luxury residential complex, everything is manufactured with extreme quality by one of the leading builders in Dubai.
It is a project that develops on an area of 743 225 m² with 222 900 m² of services, green spaces, international schools etc..
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