Indian investors have always had a soft spot for real estate opportunities in Dubai, a fact demonstrated by their increasing investment outlay, especially for purchasing second homes in the Emirate. Here’s mapping this love affair and where it stands at the moment.
The day is not far when Dubai will be a second home for a large chunk of the Indian population. Going by the increasing investment levels of Indians in the Emirate, it seems to be heading towards reality soon! Dubai has seen Indian citizens becoming the biggest real estate investors, drawn towards its efficient administration, business opportunities, economic development, top-notch infrastructure, higher quality of life, inclusive local community, and tax-free returns offered here.
Indian investors are increasingly inclined towards Dubai’s capital appreciation and the currency which is tied to the U.S. dollar. The fact that the currency has remained largely non-affected by Forex movements is a big plus point for many Indian investors, especially HNWIs and UHNWIs. Real estate units in Dubai are also sold on the basis of their carpet areas, unlike the built-up area practice followed in most Indian cities. Hence, Dubai is steadily drawing a flow of Indian capital towards its booming real estate market. More and more investors are increasingly watching out for lucrative real estate deals in the Emirate. The investor brigade does not only include those based in India but Indians working in the UAE at the moment.
Past Figures- Where the Love Affair Deepened
- The DLD (Dubai Land Department) has testified to realty investment growth of 2.1% for 2019, touching Dh226 billion.
- 42% was the growth figure for off-plan or under-construction property investments.
- After Emiratis, Indians were the second highest property investors for 2019 at approximately $2.2 billion. Yet, their overall count was higher at an impressive 5,426 citizens.
- Indian investors started getting more attracted towards Dubai with the RBI’s liberal scheme for remittances up to $250,000 in transfers legally every year. Tax-free returns to the tune of 8-10% are another factor as per experts. The property registration procedure in Dubai is also a lot easier.
- Investors are also drawn to free residence visas for Dubai upon an investment of $260,000 on average.
- Property prices are also competitive in Dubai as seen against those in India’s big cities. Mumbai has prime real estate costing anywhere around $700-900 per sq ft as per estimates while downtown Dubai property may be purchased for $400 per sq ft and upwards. 93% of realty deals in 2019 were seen in freehold zones as a result.
- Jumeirah Village Triangle had the highest yields at the time with 9.2% which was higher than those in other global cities like Hong Kong, London and Singapore.
- Commercial and residential property purchases also come without taxes.
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How It Evolved
- Affluent Indians kept investing in Dubai, especially medium and small enterprise owners and well-placed professionals.
- Second homes gained traction in Dubai all throughout the pandemic, especially since the Emirate is well connected to almost all global business hubs.
- Experts pegged rental returns at anywhere around 6-10% in Dubai which is higher than benchmark rates in several developed global nations.
- $1 million in Dubai for instance, will still purchase a lot more space than Mumbai, London, Monaco, Singapore and other countries.
- Investors also feel safer due to the high regulation and stringent laws in Dubai’s property market. RERA is stringently implemented here, with the market being far more transparent and compliance-driven.
- Q1 FY2020-21 saw 15% growth in realty deal, where Indian investors played a bigger role than before.
- Many buyers started picking up properties in the Marina, Palm Jumeirah and Downtown. Many displayed a preference for high-end properties with all amenities and did not mind paying a slightly higher price for the same.
- Indians who were only looking for ROI picked up properties in areas like Jumeirah Lake Towers, Jumeirah Village Circle, Dubai Hills Estate, and Meydan.
- Many couples picked up apartments in Dubai while bigger families chose independent homes or villas.
- By June 2021, every month had witnessed record realty sales volumes as per experts.
- There is high demand for serviced apartments too, with several visitors staying in Dubai for a month or a few weeks on business.
- Dubai has allowed 100% business ownership without any local partner being required and this has spurred higher real estate investments in the Emirate. The Golden Visa initiative has also made a Dubai residency more attractive to Indians.
Dubai’s pro-active policies and an efficient Government administration, coupled with negligible crime rates are major draws for Indian investors as per experts. They have greatly appreciated the smooth vaccination coverage in the Emirate along with various infrastructural developments. Dubai is also just 3.5 hours away from Mumbai via flight, making it readily accessible for Indians aspiring for a second home in the city. The overall quality of life is unmatched and far better than many other cities. Add to that the high population of expat Indians, varied options in terms of cuisine and entertainment and other cultural similarities and you have a win-win scenario.
