Destination Dubai

KHI targets promising new Middle East market 

With a presence already in the property markets in Turkey, Portugal, Spain and Scotland, the Keyholders International brand is expanding into new regions, confirming “destination Dubai” as the award-winning international real estate agency’s newest location.

With no income tax, capital gains tax or taxes on properties for investors to worry about, the Middle Eastern emirate has recovered well in the wake of the global pandemic.

Policies have also encouraged business growth and expansion with interest in investment from around the world. As a result, the demand for accommodation has also increased, influencing the performance of the property market.

But, if you’re considering buying a home or acquiring one to let, what makes Dubai an attractive proposition?

Recent trends

Dubai is a safe country with a good security record. The government is stable, the rule of law is enforced and there has been considerable investment in the police and security network.

But thanks to some intensive global marketing over recent years, the emirate’s tourism and hospitality market is also performing well, bringing new visitors to the region. This in turn has helped the economy and enhanced the numbers of businesses and individuals interested in either investment or relocation.

A total of 23.7 million tourists visited in 2022, making Dubai one of the world’s top destinations.

Rental options

An increase in the number of visitors has boosted demand for short-term rentals but inquiries about longer-term rentals have also increased as the expatriate community has grown rapidly, partly thanks to the Golden Visa programme open to those who invest in property.

As a result of a growing population, rental yields in Dubai are now among the best around the globe with some parts of the emirate able to offer as much as 8% - double those you could expect in London, New York or Paris.

As a rule rental apartments tend to perform better but location also plays a big part. Buyers would also be well advised to only consider net return figures rather than gross. Factors such as property management costs and service charges can take a big bite out of rental income.

As void periods are more likely for some property types and in some locations than others, investors also need to make sure they are making a careful and informed choice on their investment. For example, yields on accommodation in downtown Dubai are likely to be a lot less than the International City. Town Square villas also tend to perform much better than property in Palm Jumeirah.

Property purchases

Speedy returns on home purchases are less likely in Dubai where prices are not currently rising at the same speed as other regions. Investors looking for a quick “flip” over a short period would be better considering other markets such as Turkey.

However, asking prices for property in Dubai may come as a pleasant surprise. Despite its affluent reputation, property is actually quite a bit cheaper than some of the world’s other major cities. According to figures from reputable national agents Knight Frank, the average price per square foot in Dubai is around $620 compared to $2,000 in London or $1,900 in New York.

Investors can also expect to find plenty of choice from luxury family-sized villas to studio apartments. Many are also offered with affordable payment options to suit most budgets. The Dubai Land Department estimates the average annual return on investment in the property sector is between 5% and 8.4% - better again than New York, London or Singapore. However, to be accurate, buyers would need to make their capital return calculations over the whole period of their ownership.

If you would like more guidance on a purchase in Dubai or any of the other markets where we are active, we would be delighted to assist. We can also offer advice on the logistics involved in relocation overseas as well as the practical side of moving to a home abroad.

Alternatively, feel free to browse our blog for previous posts you may find useful. You can also keep up to date with our Facebook page here.