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I was reading with interest an online article recently that underlined the top reasons why Dubai’s property was so popular with Indian nationals. The reasons offered are not really surprising and essentially summarise why investing in property in the emirate has had significant appeal for not just Indian investors, but those from every corner of the world.
Dubai is easy
Compared to many countries in the world, investing in Dubai’s real estate sector is relatively easy. Enlist a reputable brokerage, select your desired property, negotiate a price, write the necessary cheques and the property will be yours.
Bureaucracy, which makes investing in other countries a pain, is virtually nonexistent and, as long as you follow procedural requirements, your property transaction will be processed efficiently and without undue delay.
Dubai provides superior value for money
When compared to the major Indian cities or big cities around the world, Dubai offers increasingly better value. A modern infrastructure that is continually being developed, a renewed focus on affordable housing, world-leading rental yields and finance rates that have been at historic lows for some time now, the value that is inherent in Dubai property is hard to beat in India or any other country in the world.
Dubai provides superior, tax-free rental yields
Put simply, there are not many real estate markets in the world where an investor can enjoy an average 7 per cent yield without paying any local taxes. So, net of service charges, maintenance costs and property management fees, the rent that you charge your tenants goes straight into your wallet without the taxman taking his share.
And with the cost of finance remaining at near historic lows, the interest on any borrowings you may have is easily covered by the rent that is being yielded by your property, leaving more free cash flow to pay down your principal.
Dubai doesn’t impose a capital gains tax
In addition, capital gains are not taxed upon disposal of the asset, which makes investing in Dubai property a very lucrative addition to any investment portfolio - when taken with a long-term view, a Dubai property investment will provide handsome returns. So from a total return point of view, there are few real estate investments that are better than Dubai.
World-best infrastructure and security
Many times, investments that provide such lucrative returns are normally associated with excessive risks or poor infrastructure. This is not the case in Dubai. Dubai’s focus has been on developing a world-leading infrastructure for the benefit of commerce, trade, tourism and habitation.
The remarkable improvement that has been made in opening Dubai up for business, implementing the physical, digital and logistical infrastructures, legal framework and economic policies in the post-recession period has been impressive. There is no doubt that Dubai’s future is looking very bright and investors globally continue to monitor its progress very closely.
Dubai’s brand value has never been stronger
There is no doubt that Dubai has captured the imagination of the world and there is no better barometer of this than its burgeoning tourism industry. Investments in revenue-generating sectors such as entertainment and hospitality have ensured that Dubai is increasingly being included on travellers’ bucket lists all over the world.
Dubai excels at economic entrepreneurialism
Dubai is excelling in an area I call economic entrepreneurialism. Already known for conducting world-renowned exhibitions, there is no greater example than the upcoming World Expo, which Dubai will be hosting in 2020. Dubai is committed to making it the best ever.
Dubai is close to India and many countries
There is no doubt that Dubai is well placed geographically. With one-third of the world’s population within a four-hour flight and two-thirds within an eight-hour flight, existing emerging economies such as Russia, India and China, and soon-to-be emerging economies on the African and South Asian continents will soon all share Dubai as a central hub. No wonder investors are so excited about the emirate’s prospects.
A multicultural and cosmopolitan society
Long a haven for expats that fulfilled employment contracts of limited duration, more and more people have decided to settle down and call Dubai home. This change in outlook has had a dramatic effect on the stability of the property market and the development of a society that, while incredibly diverse, is also less transient and more committed to developing the emirate as a long-term lifestyle solution.
As a result, while there has always been a vibrant and strong Indian community, communities representing other nationalities are developing rapidly making it easier for new expats to make a decision to make Dubai their new home. History has proven that strong nations were built upon such diversity.
Source: Mohanad Alwadiya, Special to Property Weekly
The writer is CEO of Harbor Real Estate