Future Investors in Dubai’s Property Market: Who and Why

International buyers are set to remain the backbone of Dubai’s real estate market, drawn by its strategic location, tax-free status, and attractive investment climate. Investors from Australia, the UK, Europe, North America, Turkey, and Iran are expected to lead the next growth cycle, lured by higher returns than in major markets, a tax-free environment, and increasing taxes and economic challenges in their home countries.

Industry experts highlight that traditional investors from India, Pakistan, and the Middle East will also continue to be major contributors to Dubai’s fourth growth cycle. This follows three previous cycles: pre-global financial crisis of 2009, 2014, and post-Covid. Many believe the third cycle, which peaked in 2023-24, is nearing its end, setting the stage for the fourth cycle characterized by a slight correction before renewed growth.

European and Other Global Investors

Guillaume Giroux, CEO of Elysee Vendome Real Estate, anticipates that the next property cycle will attract a diverse range of international buyers. “French investors, facing uncertainties in Europe, continue to find Dubai appealing. We expect many European nationalities to influence Dubai’s market in the future,” Giroux said. High taxes and lower returns in Europe are driving investors towards markets with higher returns and stable regulations.

Mouna Muller, client manager at Betterhomes, noted that as the third cycle concludes, the fourth will be driven by diverse investors. Higher taxes in the UK, Australia, and Europe will push investors towards Dubai’s tax-free and investor-friendly environment. “Europeans are drawn to Dubai’s lifestyle, business opportunities, and favorable residency programs. Iranians seek economic and political stability, while Turkish investors are attracted by economic diversification and high-quality real estate,” Muller explained.

Ramjee Iyer, chairman and managing director of Acube Developments, emphasized the appeal of Dubai’s tax-efficient environment for investors from high-tax countries like the UK, Australia, and Europe.

Shift in Investor Demographics

Industry insiders suggest that while the influx of Russian investors has slowed, Chinese investors are emerging as major players in Dubai’s property market. Recent data shows British investors have overtaken Indians in the race for Golden Visas, drawn by tax-free benefits, high rental yields, and Dubai’s luxury lifestyle. “Chinese investors are becoming a major force due to strong economic ties between the two nations,” Iyer noted. Turkish and Iranian buyers also find Dubai’s stable economy and innovative projects attractive.

End-User Market Evolution

Paul Christodoulou, CEO of Aqua Properties, anticipates growing interest from European investors, particularly Germans. He noted a significant influx of British, Australian, Singaporean, and North American investors, attracted by Dubai’s zero per cent tax on investments and income. “Many of these investors are planning to relocate with their families and are buying properties with both investment and long-term living in mind,” Christodoulou said. He added that Dubai is evolving into more of an end-user market, with a substantial number of residents investing in property.

Continued Dominance of Foreign Investors

Foreign investors will continue to dominate Dubai’s property market, drawn by its strategic location, tax-free status, and appealing investment climate. “This trend will remain strong, with Dubai continuing to attract foreign investors. However, there is growing interest among UAE residents in property investment, which could stabilize the market over time,” Muller said.

Ramjee Iyer highlighted that foreign investors, both expat residents and non-resident buyers, significantly influence Dubai’s market. “Their interest is driven by factors like security, high rental yields, tax incentives, and lifestyle opportunities. This trend is expected to strengthen,” he concluded.

Guillaume Giroux pointed out that the majority of investors in Dubai’s property market are from Europe, underlining the international appeal of the emirate’s real estate sector.

Reference:
Abbas, W. (2024, June 24). Revealed: Who will invest in Dubai’s property market in future and why – News | Khaleej Times. Khaleej Times. https://www.khaleejtimes.com/business/realty/revealed-who-will-invest-in-dubais-property-market-in-future-and-why