Most Profitable Areas To Buy Real Estate Property in Dubai in 2023
Even in the global economic recession, the property market in Dubai remains attractive for foreign investors. The main reason for this is the stable economic growth of the emirate, the almost zero tax policy, and a steady housing market. Despite the difficult pandemic situation in 2021, real estate sales in Dubai touched 61,441 units, worth approx. 151 billion dirhams (41.1 billion US dollars) which was the highest number since 2013.
Appropriate Area Selection
There are many factors behind choosing the area for buying real estate in Dubai. The main factors are the purpose of the purchase and the cost of the objects. The average ROI varies between 5.5-6 per cent, whereas, in some projects and areas, the average ROI may be offered between 7.6 per cent and 8.4 per cent per annum.
Most of the investors and buyers in 2022 were seeking real estate that offered a combination of high levels of comfort, quality, and a convenient location relative to key locations in Dubai. Business Bay, Arabian Ranches, Dubai Marina, and Palm Jumeirah were the most preferred famous areas for top-notch clients who were seeking to invest in premium villas and apartments in Dubai.
Developers’ Manipulation with Area To Allure Buyers
There are always many promotions and discounts going on in the Dubai property market. But the investor must be very cautious in considering these offers. The latest trend going on is the reduction of footage. For example, the sale of a one-bedroom unit is announced by a developer at a price lower than the other competitors. But when you carefully review the offer, you will note that the price per square meter is the same because the footage of the unit is reduced by 10-20 per cent. They are so smart that they will prepare the layout in such a way that you will not feel the difference immediately.
Small developers usually cut the footage even up to 40 per cent to offer lower prices to attract more clients. Every client should be informed that any developer can make a valid error of 5 per cent of the declared footage. If the client has been promised a unit of 100 square meters, then the client should legally get 95 square meters or more. If not, then the developer will be liable to pay the penalty.
The Apartments Under Construction May Be Resold Under The Contract
Any investor can invest in the property market in Dubai for a small period. Example:- buy a unit at an excavation stage. After that when the frame is ready, sell it. The law does not forbid this, the contract must be read carefully. All the restrictions and conditions are mentioned there. Usually, it is essential to pay the developer 30 to 50 percent of the total price of the unit, to have the right to resell it.
Profits By The Type Of Unit
Profitability of the residential property market:
- Low Yield Of Working Housing: The switch to remote work has resulted in a sharp drop in demand thus resulting in the drop in prices across the working housing sector in Dubai.
- Uncertain Yield From Elite Residential Property Market: This type of property market has slowly reduced prices of constant oversupply for more than 10 years. The pandemic has made the scenario worse. Investors tend to buy the property and then sell the whole property in the future because of the higher resale prices. Accounting for only 13 percent of the whole residential property market, this showed growth of 6.3 percent YoY and 7 percent QoQ. These properties are more often bought than rented.
- High Profitability Of Family Apartments And Villas: The most famous among the investors in Dubai. The average cost in this sector has gone up from AED300,026 to AED799,826 from 2013 to the present time. Large apartments exist because of the high rental demand. This particular sector lets you earn on resale in addition to earning from rent. This trend is because of two major reasons: affordable mortgage rates and the increasing popularity of contracts. Big units meet this demand, and low mortgage allows more people to move from renting to buying a unit in Dubai.
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