Indian investors: surge in Dubai real estate market

Dubai's thriving real estate market offers a wide range of properties, attracting investors from around the world, including from India, who are increasingly buying and investing in real estate in Dubai. Indians have consistently ranked among the top three nationalities purchasing property in Dubai since 2004. From 2015 to 2021 alone, investors from India acquired real estate worth 83.62 billion dirhams in the city. In addition to residential properties, significant commercial projects are also being developed in Dubai, including office spaces, shopping malls, and hotel properties. The presence of free zones and various business-oriented policies attracts international companies, positively impacting the demand for rentals. Real estate is one of the key factors in the UAE's economy, contributing about 5.5% of the total GDP. As Dubai experiences a strong recovery from the COVID-19 pandemic, its real estate market is also thriving.

Restoration of Dubai's economy

Dubai is experiencing a rapid economic recovery after the COVID-19 pandemic, largely thanks to a boom in the real estate market, an increase in tourism, and an influx of foreign capital. The city has set ambitious goals under a 10-year economic plan known as D33, aiming to double the size of its economy and make Dubai one of the top four global financial centers within a decade. Additionally, government initiatives such as the "golden visa" have played a significant role in attracting foreign investments, talented individuals, and increasing the issuance of new business licenses by more than 50%. The real estate market has become a strong player in Dubai's economic recovery, with average property prices rising by 12.8% in the first quarter of this year, and villa prices increasing by nearly 15%. Last year, Dubai was the fourth most popular premium real estate market in the world, with 219 home sales exceeding $10 million. As Dubai strengthens its position as a regional hub for finance and business, we are witnessing a direct impact on the real estate market, which attracts investors and fosters further development in the sector.

The real estate market in Dubai

The Dubai real estate market is expected to grow to over 300 billion dirhams by the end of the year. Unique Properties, a leading real estate agency in Dubai, stated that they anticipate strong growth in the sector in the second half of 2023. Data indicates significant growth in both the residential and commercial markets in 2023 compared to 2022. In the first half of the year, the residential market recorded sales of around 93 billion dirhams, representing a 46.7% increase compared to 2022, while the commercial sector grew by 30% compared to 2022, reaching a total of 2.86 billion dirhams. This substantial growth in the real estate market can largely be attributed to government initiatives attracting foreign investment, as well as a strong recovery from the COVID-19 pandemic. Dubai's commercial real estate looks very promising, especially at a time when real estate consultants agree that it is important to invest in office spaces.

Real estate and technology

The Dubai real estate sector recognizes the importance of implementing innovations, leading to the emergence of proptech or real estate technologies. These innovative technologies aim to optimize processes related to real estate transactions and contribute to the further growth of the market. Proptech solutions also seek to enhance the convenience of searching for and purchasing properties and ultimately improve market access by providing more accurate data about it. The UAE is already home to 55% of proptech startups in the Middle East and North Africa region. "With Dubai's ambitious plans to double its population to 5.8 million by 2040, additional residential property supply will be needed to meet the growing demand," said Rami Tabbara, co-founder of the real estate investment platform Stake.

Indian demand for Dubai real estate

According to data from the Dubai Land Department (DLD), Indians have been a dominant force in the Dubai real estate market over the past decade. In 2022, Indians became the largest homebuyers in Dubai, with purchases amounting to 35,000 crore rupees, according to recent reports. Indians spent almost twice as much on residential property in the city over the last two years, with the average price of homes purchased by Indians ranging from 3.6 to 3.8 crore rupees. This trend is largely driven by businessmen and active investors. High rental yields are one of the main factors attracting Indian investors to Dubai. Real estate investors can expect a return on investment of around 5-7% from rentals, which has remained stable over the past few years. For many investors, Dubai offers more favorable conditions than major cities in India, such as Mumbai and Delhi. However, there are several factors that make Dubai an attractive place for Indian investors beyond rental yields. Dubai is strategically located between Asia, Europe, and Africa, making it an ideal hub for international trade and commerce. This is a key incentive for Indian investors and business owners looking to expand their operations into new markets. The stable political climate and business-friendly environment in Dubai have created a safe space for Indian investors to protect their investments. Additionally, the government also supports foreign investments and takes measures to make the city more appealing to investors. Dubai's strong and growing economy offers numerous opportunities for Indian investors looking to capitalize on regional growth potential. With no income or capital gains taxes, Dubai positions itself as an attractive investment destination, especially for Indians who may face significant taxes back home. Dubai is known for providing its residents with a high quality of life. The city offers top-notch infrastructure, high-end residential and commercial properties, business and shopping centers, as well as a safe environment, making it an ideal place to live. The large expatriate community in Dubai, including a significant number of Indians, contributes to a sense of familiarity and comfort for Indian investors and residents. Above all, thanks to Dubai's diversification strategies, a thriving real estate market has been created, which is expected to continue growing, and Indian investors do not want to miss out on the opportunities presented by this dynamic market.

Future

The demand for the Dubai real estate market is expected to continue growing in the coming years, with Indian investors playing a key role in this growth. Some of the main factors driving this optimistic forecast include a technological boom with increasing support for startups, which is turning Dubai into a global innovation hub. Additionally, government support for significant infrastructure projects, such as the expansion of the red metro line and the modernization of roads and bridges, will continue to stimulate economic growth, create more business opportunities, and attract more investments.