Middle-class Indians, particularly from tier-1 and tier-2 cities, now account for 50% of Dubai’s new property launches. This is driven by rising inflation and growing appeal in the emirate’s real estate market. For instance, the prices of apartments and villas in Delhi and Mumbai, two of India’s top metros, begin at Rs. 5 crore or more. Incidentally, this is also roughly the average price of properties in Dubai. When property buying becomes the choice of spending a fortune in the domestic market or investing in the world’s biggest getaway destination, the latter always takes the cake.
Besides the pricing edge, Dubai’s real estate market boasts steady growth and outstanding ease of investment. The country’s registered transactions and sales values have consistently increased over the past months. A reliable market prompts high investor confidence, attracting buyers from across the globe. While investors in Dubai belong to diverse nationalities, Indians continue to rank as its top property buyers.
Dubai versus India
“Property values in India have seen an impressive growth of 60% over the past five years. The average registered transaction sale value in Dubai currently stands at AED 2 million, which also stands approximately at Rs 5 crore.”, remarks Rabiah Shaikh, Chief Business Officer and Principal Partner of Global Markets at Square Yards. Comparing the two markets, she adds, “Dubai’s investor-friendly tax structure free from capital gains tax and income tax stands in sharp contrast to India’s tax regime, which includes capital gains tax and various property-related levies”.
The contrast in tax structure is crucial in tilting scales towards Dubai’s favour. India’s capital gains and income tax ranges from 10% to 20%. However, its absence in Dubai allows investors to retain profits from property appreciation and rental income. Registration fees in Dubai are capped at 4%, while stamp duty and other costs in India are as high as 7%-8% in some states. With no wealth tax, inheritance tax, or restrictions on repatriating income, Dubai offers a significantly more appealing market.
Dubai’s buyer-centred approach has not only created a more inviting environment but has also shown quantitative results. According to a 2024 report by Square Yards, the city recorded a 43% Y-o-Y growth in registered transactions, with more than 12,000 off-plan and ready residential deals. The total sale value, exceeding AED 259 billion, also marked a 34% Y-o-Y increase.
Takeaways
Dubai’s success has invaluable lessons for the Indian market. While price might be a dynamic factor, much can be done to develop an investor-friendly ecosystem. From tax relaxations to ease of purchase, the possibility of long-term wealth creation can help retain tier 1 and tier 2 property buyers. When looking for the way ahead, affordability, transparency, and economic incentives emerge as key factors in re-establishing local buyers’ trust in the Indian real estate market.
Read more through the links below to uncover the key trends and market leaders driving this growth:
economictimes.indiatimes – https://bit.ly/4hjR4AB
Published Date: 15 Jan, 2025
