Why Dubai property remains Indian investors’ best option these days

Indian buyers are doubling down on fresh property investments in Dubai and UAE. Image Credit: Supplied

Dubai’s real estate sector is on the ascent as investor-centric policies draw local and global buyers, including Indians, living within or outside the Gulf state. This fact was validated recently when Dubai real estate recorded Dh22.7 billion in sales – the highest recorded numbers over the last 13 years.

This is due to the city’s bankable location, strong investment and rental yields, capital growth, and laws. The way Dubai has handled the pandemic drawing in the ultra-rich from around the world is a case study in itself, and giving a great spike to the property market. And the way Dubai will capitalize on the Qatar World Cup will carry on the momentum for the next few years.

Since 2004, Indians have been among the Top 3 nationalities to buy properties in Dubai. For a Dh2 million plus investment, they can now become eligible for a golden visa, which allows a 10-year residency to residents as well as non-residents. In Dubai, the average price per square foot for an investment-grade property ranges between Dh1,000-Dh1,500, which equates to around Rs20,000-Rs30,000 per foot in India.

Compared to 2-3 per cent in India, the average return on residential real estate investment in Dubai is approximately 5-6 percent annually. Effectively managed, short-term rental is a massive opportunity that can enable the owner to scale appreciation to at least 8-10 per cent. This also allows investors to enjoy their property as a holiday home when visiting Dubai.

In addition, laws in Dubai protect the owner equally, allowing them to remove the tenant if they wish to sell or occupy the property for their own use. If an Indian has a stable income in their home country, they can be entitled to a mortgage in Dubai.

Furthermore, the Indian government allows resident Indians to repatriate $250,000 a year – i.e., around Dh900,000. A property bought in a joint name can fetch them about Dh1.8 million if bought entirely on cash.

A strong dollar

The dirham gets stronger to the rupee each year by 3-4 per cent thus giving you a de facto appreciation of at least that much on your investment, since the dollar is directly pegged to the dirham. The Indian rupee was worth 17.5 in July 2017 against the dirham and 21.5 in July 2022.

This showcases a 22.5 percent increase over a five-year period and clearly indicates that had you kept your money in the UAE (or as dollars in a bank), it would have risen by at least 22.5 percent, or roughly 4 per cent a year. Most people rush to remit funds to India when dollar appreciates, thinking they are getting more for their money when in fact, rupee is losing value.

All roads lead to Dubai

With a relentless focus on rapid multi-sectorial economic growth, Dubai is poised to prosper in the coming years by attracting top talent from around the world (owing to the recent labour law changes) and enjoy more foreign direct investment (as a place with the lowest corporate taxes in the world).

Some of the other major factors include zero annual property taxes, impressive financial rewards, high return on investments, robust infrastructure, outstanding hospitality, and more which make the emirate the undisputed investment paradise for Indians – or literally anyone looking to make it big.

Dubai is 2.5 hours’ travel time from Mumbai and 3.5 hours to New Delhi, that too at a value that can rival any other global metropolis.

Points to remember

Despite immense benefits of investing in the UAE, property investments should always be done wisely and for the long term. We don’t recommend investors to look at exiting the market in less than 5 years.

Also, it is best to choose an established developer and community to generate better traction on your property. And last, steer clear of deals that sound too good to be true because they most likely are ‘too good to be true’.