As the most populous urban centre in the United Arab Emirates [UAE], it has come a long way since its humble beginnings as a fishing village in the early 18th century. Today, Dubai is a stunning, sun-soaked metropolis that attracts billions of dollars worth of business and tourism from right across the globe and is fast becoming a top destination for lucrative and high-profile sporting events.
The city’s popularity makes it incredibly ripe for property investment, as many international investors have already discovered. However, it’s not too late to get in on the action. That being said, with more and more people investing in property in Dubai, those who jump in now will find themselves ahead of the rest of the pack in the long term.
Dubai’s Property Market: The numbers speak for themselves
In Q3 of 2024, the city enjoyed its most successful sales period on record for real estate business. During this period, a total of 50,423 property sales were recorded, marking a 16.6% increase on the previous quarter’s performance, and a substantial 37.9% jump over last year’s figures. Of these sales, 39,054 were attributable to apartment transactions, which themselves rose by 15.6% on the quarter before, and by 43.9% compared with Q3 2023. Villas, meanwhile, also experienced impressive growth, with sales of 8,156 achieving an 18.4% increase on the previous quarter, and a 16.6% increase on the same period last year. The city’s commercial property market also contributed a total of 1,111 sales, surpassing Q3 2023’s figures by 12%.
What’s more, the average property price per square foot has now reached 1,511 AED; a 7.5% increase on the previous year, and a reflection of a healthy market. In total, the value of real estate transactions for Q3 2024 hit 141.9 billion AED; 30.1% higher than in Q3 2023. While mortgage activity was also strong, with the 11,693 registrations made representing a 38.7% increase on Q3 2023. Furthermore, the off-plan property market achieved unprecedented sales, with 31,800 transactions beating 2009’s previous record of 26,629.
The list of record-breaking or otherwise impressive figures for Q3 2024 goes on, but the point is clear: property investors are flocking to Dubai in their droves. But why exactly is this the case?
Business is booming
In the first half of 2024, Dubai welcomed a record 9.31 million overnight guests, marking a 9% increase on the 8.55 million visitors during the same period in 2023. Not only is Dubai home to the world’s tallest building – the Burj Khalifa – but it also boasts the world’s largest shopping mall – the Dubai Mall – as well as one of the world’s most luxurious hotels – the Burj Al Arab – all of which are hugely popular tourist attractions. With so many people travelling to the city, investors are rushing to snap up property, in a bid to meet the stratospheric levels of demand for rental accommodation among holidaymakers. Furthermore, with Dubai’s first casino – a $4 billion resort replete with various five-star hotels, 22 luxury dining and lounge experiences, a 15,000 sq. metre shopping esplanade, and extravagant $7 million villas – set to open in early 2027, the city’s tourism sector is bound only to get even stronger in the years ahead.
Attractive incentives
Besides the significant demand for property across Dubai, the city also offers highly appealing incentives to attract residents and investors alike. These include a ‘Golden Visa’, which enables holders to live, work, and study in the city without the need for frequent renewals. It also entitles them to visa-free travel to over 180 countries, making travel for business, leisure, or education simple and stress-free. Additionally, Dubai has no personal income or capital gains tax on property sales, meaning that those selling property in the city can retain all of the profit without paying any tax on the property. This stands in stark contrast to other major cities, where capital gains tax can account for a significant portion of the profits from property sales, often as much as 28%. What’s more, Dubai has established double taxation treaties with a number of countries around the world, offering significant benefits to international investors. These treaties aim to prevent the same income from being taxed in both Dubai and the home country of the investor, thereby reducing the tax burden placed on foreign investors.
Even brighter days lie ahead
All in all, it is fair to say that Dubai offers a very appealing proposition to investors from around the world, and with the city’s tourism sector remaining strong, the profits that investors stand to gain are substantial.
While sales figures for Q3 2024 are, in many ways, unprecedented, it is likely that they will be beaten in the months and years ahead, as the local property market continues to go from strength to strength. Therefore, shrewd investors would do well to get in on the action now, so that they can get a head start in reaping the rewards that are set to come.
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