Those who have been living in Dubai for a long time cannot but agree that this is one of the best places in the world for living, even despite some weather features of the summer. There are a number of reasons to live in Dubai for at least most of the year. And if you do not live, then have real estate: at least for the sake of return on investment, which here averages about 7%, one of the highest rates in the world.
And now the conviction of its inhabitants in love with Dubai is confirmed by sufficiently strong evidence and facts. For example, the fact that the emirate regularly gets on the lists and tops all kinds of ratings on the standard of living and attractiveness for investment. So, according to the Global Liveability Ranking, compiled by the research department of The Economist (EIU), Dubai took second place in the world by criteria such as improvement and comfort for life. This was made possible, in particular, thanks to the numerous initiatives of the Government of Dubai in the development of infrastructure.
Why Dubai is the best place for living and business
The Global Liveability Ranking, which is part of the Worldwide Cost of Living Survey, takes into account more than 30 different factors influencing individual lifestyle, the main of which are five categories: stability, health, culture and environment, education and infrastructure - and in all these categories Dubai is developing steadily. In terms of stability, the emirate confidently ranks first in the region as the most reliable investment and economic “harbor” in the troubled environment of neighboring countries, the emirate authorities pay special attention to sponsoring and promoting projects of energy-independent residential communities and strengthening the role of culture in attractiveness of the city. A significant event of recent times was the loud opening of the Dubai Opera, which will now host the most anticipated events in the world of culture.
In general, according to the 100-point system, where 100 is ideal for life and 1 is completely unacceptable, Dubai scored 74.7 points, having improved its rate by 4.6% since 2011. And by 2020, as local authorities suggest, the city will be able to break far ahead in the quality of life.
Speaking about the quality of life, in the first place they always remember a place to live, that is, real estate.
Therefore, the Global Cities 2016 report from the analytic company Knight Frank named Dubai among the five best cities for business development and investment in real estate.
Currently, Dubai plays a leading role in the world arena in the construction of new business centers, the active development of housing construction, as well as the design and implementation of commercial, office real estate and large-scale infrastructure facilities. Dubai also ranked third after Shanghai and Beijing in the list of cities most successfully implementing the positive aspects of globalization in their development, according to the influential international agency JLL.
Dubai residence - for the purchase of an apartment worth from 1 million dirhams
“Kingdom for the horse” - such a scenario in Dubai is still quite possible against the backdrop of a love of elite leaps, but in order to avoid the deportation of your painstakingly accumulated capital from foreign banks, you do not need to pay so much. It is enough to buy an apartment in Dubai worth from 1 million dirhams (about US $ 273 thousand).
Continuing the theme of the advantages of Dubai for life, it is worth mentioning that the city is among the five most important world centers for investment by millionaires whose wealth exceeds US $ 30 million (wealthy investors or, as they are called high-net-worth individuals - HNWIs), according to versions of the reputable British consulting firm Knight Frank. To be more precise, the 2016 World Wealth Report from this bureau named Dubai the fifth in the list of cities of "importance".
In more detail about what this means and how to become a resident in Dubai, having bought an apartment, we were told by Oleg Lavrik, vice president of the Russian Council of Entrepreneurs in Dubai and the Northern Emirates and the head of IMEX Real Estate.
Oleg, it is known that in Forbes economic circles there has long been disturbing information about the deportation of accounts from foreign banks and the introduction of new rules on the automatic exchange of tax information (AEOI), which imply determining the client's residence and the requirement to provide information on the declaration of assets in the country of the resident. How in this case can the acquisition of real estate in Dubai help?
Oleg Lavrik: If we are talking about changing residence as a way out of the situation, then buying a home in Dubai can really help. One of the advantages of buying an apartment in Dubai is the issuance of a resident visa to a homeowner worth over 1 million dirhams. In addition, the applicant for a resident visa must also provide income data of at least 10 thousand dirhams (approximately US $ 2700) per month.
And then data on residency in the UAE can be used at your discretion. In addition, Dubai is not accidentally called the "tax haven." That is why many entrepreneurs come here. There are no property and income taxes in the UAE. Therefore, the ownership of real estate in Dubai, as well as the receipt of income, for example, from rent, does not entail any tax burden for the owner. In Dubai, there is no VAT, no personal income tax, no capital gains tax, or even income tax.
Are there any additional conditions for obtaining a resident visa based on the purchase of real estate that you should be aware of?
Oleg Lavrik: Perhaps it is worth adding that the property that is the object of investment should be fully owned by the investor. Also, the property must be suitable for living, and its size must correspond to the number of family members of the investor or be larger. If the property is owned by several investors, its total value must exceed 1 million dirhams.
Should I buy property in Dubai now?
Suppose the listed benefits and advantages of Dubai are obvious to you for a long time, and you have already decided on investments in housing in this country. It remains only to choose the right time. Therefore, the question of whether to buy real estate in Dubai today, and what will happen to the prices in the market, excites many. Experts from various agencies give different answers to this, but the general opinion suggests that at the moment the housing market in Dubai has reached its "bottom price" and there will be no further price reduction. But their increase is literally "inevitable." This is the term used by the compilers of a large-scale and in-depth report on the processes in the economy of Dubai, interconnected with the processes occurring in the stock, oil and residential real estate markets.
The essence of the Unitas Consultancy report entitled “Dubai: A Tale in Three Markets” boils down to the fact that the correlation between oil prices in the UAE and property prices in Dubai is revealed indirectly, through a sharp reduction in the supply segment under growing demand for housing. And the result, of course, is a rise in prices.
However, this is not all. The stock market, taking into account changes in the economy, has always previously had a positive correlation with the housing market. But last year, the value of assets in the stock market increased by an average of 28%, but this did not affect apartment prices. Therefore, this year the real estate market will simply have to balance the balance, and since last year’s “gap” was too sharp, the “return” will be greater in the form of rising house prices.
Thus, the main thing in all these statistical roller coasters is the balance of supply and demand for housing in Dubai. The main thing is the amount of new housing. It ultimately forms prices. Developers are ready to build, but, already sobered up by sharp ups and downs in these markets, it is not so thoughtless, but with an eye on demand and other factors, which cannot but be a positive factor.
Housing prices will rise - this is obvious
This is also clearly evidenced by statistics and the opinion of some market participants. In particular, the head of the Danube Group, Ridzhan Sajan, believes that the rise in price will begin soon, and it will begin in the premium housing sector: “I am surprised why property prices in Dubai still have not reached the levels of Hong Kong and London. I hold a firm belief that "that population growth will entail a spiraling rise in premium housing prices. And prices will certainly equal Hong Kong, Singapore, London."
Well, Craig Plumb from the research department of JLL Mena also believes that the housing market in Dubai is close or has already reached its price bottom, so the price curve will go only up: “Buying at the bottom of the price cycle is always a good investment for those who are focused on the long term. "
Statistics are in agreement: luxury housing continues to be sold in Dubai like hotcakes. In the second quarter of the year, six top ten properties were sold at Emirates Hills for three months for a total of US $ 49.22 million, and on The Palm Jumeirah islands - four for a total of US $ 22.95 million. And these are only villas . If we talk about apartments, the most expensive deal of the second quarter was the Armani Residences residence in the highest tower of the world Burj Khalifa, sold in May for 15.6 million dirhams (US $ 4.24 million). The market value per square meter in this transaction was AED 77,554 (US $ 21,000) - a record for the past 18 months. And this is not surprising, because at almost the lowest cost per square meter of elite housing among other cities in Europe and Asia, the amount of income from investments in Dubai's housing is the largest in the world.
The total value of housing transactions registered by the Dubai Land Department in the second quarter of 2016 amounted to US $ 30.64 billion, which indicates a steady growth and development of the industry. And among foreign investors, far from the last place is occupied by Russians. If last year Russian citizens spent 2.75 billion dirhams on apartments and villas in the emirate, then this year, as soon as the ruble strengthened a bit, the Russians continued to actively buy housing in Dubai, having spent 727 million dirhams for six months.
The most popular options for investing in real estate have been and remain such popular areas of Dubai as Dubai Marina, Business Bay, Jumeirah Village Circle, Sports City and International Media Production Zone. In addition, these areas are predominantly multi-family residential complexes, housing in which you can profitably rent out to small families. If you want to buy something more substantial than a small apartment, and at the same time for your own living, then it is worth considering options for buying villas in areas such as Emirates Living, Jumeirah Park or Jumeirah Village Triangle.
At the same time, the elite real estate market in Dubai plays an important role in the unique and paradoxical phenomenon that is characteristic only for Dubai. It lies in the fact that the average profitability of housing, currently approximately 7% per year, is one of the highest in the world and does not decrease even despite a decrease in the average cost of renting affordable housing. Rental prices in the elite real estate sector remain stably high, and the price per square meter is low, compared to similar offers in other cities.
Thus, everything is balanced in Dubai, and everyone here will find exactly what they are looking for, be it affordable housing for rent or luxury real estate as an investment.
You can obtain additional information about the acquisition and management of real estate in Dubai from IMEX Real Estate specialists by phone in Moscow +7 495 510 0008, toll-free phone in the UAE 800IMEX (8004639) or by sending a request by e-mail [email protected].
Posted by: Helena Kryukova
