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Dubai has always been a major attraction for residential property buyers from all over the world. This is because it has emerged as a major global metropolis, and everyone wants to own a part of that.
Buyers and investors worldwide are increasingly taking interest in buying properties here.
Recent reports have indicated that Indians topped the list of foreign property buyers in Dubai, followed by buyers from Pakistan and the United Kingdom.
The other major foreign investors in Dubai's realty sector are from Iran, Canada, Russia, the United States, China, France and Afghanistan. Meanwhile, Jordanians topped the list of Arab investors.
This positive growth reflects the momentum gained by Dubai's real estate market which is reasserting itself on the global stage.
The influx of funds from Arab countries, which are affected by civil unrest, has also significantly helped Dubai's real estate sector to remain strong.
The emirate's tax-free property status mainly lures these foreign investors. Other major factors that attract investors are the city's safe haven appeal, tightly regulated property market, solid national economy, excellent growth potential, strong capital value gains and attractive rental yields.
The city's lifestyle offerings, secure and peaceful atmosphere and world-class infrastructure are also among the important influencing factors that have identified it as a property investment destination.
The recent increase in property deals by foreigners also underscores the impact of the economic rebound on Dubai's appeal as an investment hot spot, coupled with the requirements fuelled by its preparation to host the Expo 2020.
The hosting of the Expo 2020, for one, is creating huge demand for properties surrounding the site. Aside from residential properties, developers are also scrambling to build commercial and industrial options.
The market confidence in the future growth of Dubai's real estate sector is actually based on tangible measures and recent performance.
The value of the real estate transactions increased several folds since the rebound of the market in 2013.
The performance of the realty sector has been extremely good during the past couple of years, with an increasing housing demand as people from different parts of the world are moving to Dubai, thanks to increased investor confidence in its properties and growth in deals.
These are positive indicators for further growth, both in terms of quality and quantity.
The doubling of the residential property prices last year caused fears in some corners – that another market bubble was coming up and that a subsequent crash akin to that of 2008 would happen. However, experts have confirmed that the market is now stronger.
The market is also witnessing the foreign demand base expanding from individual investors to institutional players.
However, the trend is not in favor of overseas investors when it comes to buying commercial properties, office buildings, hotels and other prime income-producing assets in the city as the major chunk of such properties are owned by the developers and wealthy families.
The launch of several new residential projects in the market targets foreign investors, who show great interest in such projects, especially those in exclusive communities.
Considering this, many developers are now focusing on the expansion of well-established communities that create a sense of exclusivity and they are delivering on their promise.
The future will witness more demand from foreign investors, in light of forthcoming major projects announced by the government and several private sector developers.
Know why UAE remains a stable and safe choice for investors
Source: Yash Shah, Special to Freehold
The writer is Property Sales & Leasing Manager - SPF Realty