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2024 Exclusive Guide: Where and How to Invest in Dubai Real Estate

2024 Exclusive Guide: Where and How to Invest in Dubai Real Estate

Table of Contents

Which is the best area to invest in Dubai?
How Important is Location in Dubai Real Estate?

Which are the most growing areas in Dubai?

Being about to invest in Dubai real estate can make you get concerned with similar questions like these. When you face your opportunity to Invest in Dubai, it is obvious that the best area to invest in Dubai must perfectly match your needs and goals. Let’s make it to the point through this blog. So, you can get a clear idea about where to finalize your area to invest in Dubai.

Areas You Can Prefer to Invest in Dubai

Dubai Creek Harbour

2024 Exclusive Guide: Where and How to Invest in Dubai Real Estate

If you’re a small family, you can consider Dubai Creek Harbour as the best option to invest in Dubai. This area is so amazing with the most incredible amenities like Central Park, the Promenade and more. Beyond that, Dubai Creek Harbour is set for even better connectivity in the future. Over the past four years, property values here have reached from AED 1.4 million to AED 2.4 million for a one-bedroom apartment, which is almost double than that of the initial price value. This growth shows just how efficient this area is for investment. If we consider the price per sq ft of Dubai Creek Harbour over the past 3 years; in 2020 the price per sq ft for the properties here was around AED 1400-1500, and by 2024 it has touched AED 2200 per sq ft, which means it has gained around 45%+ appreciation. Looking into the future, in 3 years the prices are expected to reach AED 3000 per sq ft, which clearly shows how confidently you can make Dubai Creek Harbour your area to invest in Dubai. In terms of rental, Dubai Creek Harbour has witnessed an increase of 50% in rental income. The rental prices were AED 50,000 in the initial stages and eventually it reached AED 1,00,000 by the year 2023. All these facts make Dubai Creek Harbour one of the best investment choices in Dubai.

Dubai Hills Estate

For larger families, Dubai Hills Estate is a perfect choice. Making it specific, you can opt for the Maple 2 community as a rewarding area to invest in Dubai. Here, spacious four-bedroom townhouses have appreciated from AED 2.6 million to AED 4.7 million in the last six years. Again, nearly a doubling appreciation in value! Let’s generalize it for more understanding; if you’re buying a property here in Dubai Hills Estate for around AED 3.5 million now, it can be clearly said that you’re buying or investing in a property that has the whole potential to grow up to AED 8.5 million. Because this community truly holds the ability to appreciate the price value by 15% year over year. Hence, all the fingers now point out Dubai Hills Estate as a solid choice if you’re looking for long-term appreciation.

Investment Strategies in Dubai

Now, let’s talk about strategy. The best timeframe to invest in Dubai is at least five years. You need a minimum of three years to see significant profits and appreciation once you invest in Dubai properties. Investing for less than a year? That really sounds more like gambling. Just as nurturing a tree takes time for it to bear fruit, exercising patience will allow your property to appreciate fully.

Key Factors to Consider

When investing, focus on three key things:

  • Location: Choose an area that suits your lifestyle and investment goals. Location is a critical factor in real estate investment. In Dubai, properties in prime locations tend to perform well.
  • Developer: Go with reputable developers known for quality and timely project completion.
  • Consultant: Work with an experienced real estate broker who can guide you through the process.

Prices in Dubai Too Expensive?

It’s true that the prices have risen a bit recently. Returning back to the level before the pandemic, the prices are just stretched back to their real position. For example, in the year of 2014, Downtown Dubai was transacted around AED 4,000/ Sq Ft. Today, it’s around the same. Similarly, properties in Palm Jumeirah were about AED 7,000/ Sq Ft back then, and they’re still at that level now. This truly indicates that Dubai’s property prices haven’t actually increased uncontrollably; they’ve simply recovered to their pre-pandemic values. More importantly, Dubai’s prices are still catching up to their true potential. Think about cities like Singapore, Hong Kong or London—Dubai’s strategic location, geopolitical stability, and economic importance make it comparable to these major hubs. Given the significant foreign direct investment and the tax benefits for expats, there’s no reason why Dubai’s prices shouldn’t eventually reach those levels.

Comparison of Dubai vs. Other Global Cities

If we look at 1 million dollars and what you can get in similar markets like New York, Hong Kong, LA, Miami, and London? Actually, that money won’t be enough to buy a well packed unit. But in Dubai, you can get 3-4 times as much space or plot more than you would buy in those markets. Compared to other luxury markets, Dubai is the most affordable real estate. Right now, Dubai is the only city that grows above 13% annually on a global basis. Making it detailed; As per Knight Frank’s The Wealth Report, in Dubai a $1 million can secure you about 105 sqm of prime property. In Hong Kong it offers 21 sqm for the same amount. New York, the city that never sleeps, provides 33 sqm. In London, Paris, and other major cities; the exact numbers might vary, but it’s clear that Dubai offers more space for the same price. In fact, in 2023, Dubai even exceeded cities like London, New York, and Paris to secure the title of the world’s leading luxury property market.

Increase in investor confidence: 10 years ago, Vs Now

  • Healthcare has become mandatory by ensuring better living standards.
  • Introduction of Golden Visa program granted residency to investors who bring in AED 2 million in capital. Over 152,000 of these visas have already been issued.
  • 100% ownership for the investors on their companies
  • Growth of population from 1M to 3.8M since 2000, shows a huge influx of people choosing Dubai.
  • With 24 million people arriving at Dubai, Expo City attracted global audiences.
  • Expo 2020 has boosted interest in real estate after the pandemic era.
  • Moreover, Dubai has seen a significant increase in international investors. For instance:
  1. European investors grew from 2% to 8%
  2. Chinese from 4% to 13%
  3. American investors increased from 0.2% to 2%.
  4. Even high-net-worth individuals from Africa with around 300 arriving each year.
  • International investors bringing families and making long-term commitments to living and investing in Dubai.

This is just the beginning for Dubai real estate. The current prices, around USD 600/ Sq Ft are expected to climb towards their true potential which is closer to USD 5,000/ Sq Ft. Now is the right time to invest, before prices reach those higher levels.

Premium or Ordinary product?

What’s the profit gain of buying a one-bedroom apartment of 1.8M at Dubai Creek Harbour over a two-bedroom apartment in JVC for AED 750K?

To answer this, let’s see long-term capital appreciation and capital preservation.

  • Capital Appreciation: First, let’s compare the numbers; In Pre-pandemic, apartments in JVC were around AED 650K. Now, they’re about AED 750K. That’s a modest increase and while the rental income is around 10%, you’ve only made about AED 140K per year from rentals. On the other hand, an apartment in Dubai Creek Harbour, specifically Palace, has appreciated from AED 1.25M to AED 2.3M in the same period. That’s a gain of AED 1 million compared to the AED 140K from JVC rentals. So, buying premium real estate has significantly outperformed in terms of capital appreciation. Capital appreciation is a key factor that makes one invest in Dubai. With the right investment, it will always outperform rental returns.
  • Capital Preservation: Starting with a premium property stands as a better capital preservation. Buying property at a discount means paying less than its usual price. In Dubai, where market fluctuation or a drop usually stays around 15%, buying at a 30-35% discount means even if the market falls, you’re still likely to be ahead if you need to sell the property.
  • Why Emaar Communities? Emaar, for instance, offers payment plans like 90/10 or 80/20, attracting only healthy investors. These payment structures mean that if the market drops, the investments are more secure because investors typically have deeper pockets and better holding capacities. In case of a market drop, people generally prefer to live in Emaar communities because the facilities and exclusivity are next level. This preference means investors and end-users will gravitate toward these premium areas, moving away from less preferred developers. This demand helps maintain and even increase the value of premium properties.

So, when deciding between premium and ordinary real estate, consider the long-term benefits. Premium properties not only offer better capital appreciation but also greater security and desirability.

Off-Plan or Ready Property?

What happens when you buy a ready property and the market drops? You could lose up to 20% value of your property. However, when you buy off-plan, the developer normally gives a 30% discount on current market prices. This discount acts as a buffer against market fluctuations to keep your investment safer. With an off-plan property, you’re on a payment plan. So all your capital is tied up in the investment, giving you more liquidity. You can use this liquidity to invest in other opportunities to cover any potential price drops in real estate.

  • Mortgage: If you can’t afford an off-plan project it’s better not to go for it. If you’re depending heavily on a mortgage and struggling to cover all payments, then a ready property might be the safer option. But if you have the capital, buying off-plan means you avoid 5-6% interest that banks charge for mortgage payments.
  • Appreciation: When it comes to appreciation, off-plan properties have significant advantages. In Emaar communities, apartments typically appreciate by about 100-150% during construction, with rental returns of 12-15%. Townhouses can appreciate by about 200% during construction and later yield rental returns of 5-10%. For instance, Dubai Hills Estate has appreciated by 470% since its launch in 2016, and the Valley has already appreciated by 297% since 2019. Clearly, off-plan properties can offer substantial returns.
  • Case Study: Let’s consider a recent launch like The Heights. Comparing it to Shamsa Townhouses in Expo City, Expo City is selling at AED 1560 per square foot, while The Heights is at AED 1000 per square foot for the same size and type of townhouse. It’s clear that The Heights will appreciate to at least the level of Shamsa, with an additional market appreciation of about 60% during construction. This means we can conservatively expect a 200% capital appreciation for The Heights.

A 4-bedroom Nima Parkside in the Valley saw an investment appreciate from AED 1.8 million to AED 3.3 million in just three years. These figures are real, and you will just need to take the step forward to invest in Dubai with that right project.

Conclusion

In conclusion, buying off-plan properties offers better protection against market dips, significant capital appreciation, and financial flexibility. If you have enough money to invest in an off-plan property, then it’s a much better option than buying a ready property.

FAQs

What is the real estate outlook of Dubai in 2024?

Holding all the strong factors that makes Dubai the most preferred, it is going to lead more confidently in 2024. With the property market expected to witness great appreciations and rewards ahead, Dubai is offering the best opportunities to invest in.

Why 2024 for Dubai investment?

Dubai offers a combination of factors that makes its status even richer than it was. The factors like Dubai’s tax-free environment, booming economy, strong tourism industry, competitive prices, and world-class developers create 2024 a safe, stable, and profitable investment opportunity.

Why is Dubai attractive to investors now?
  • Healthcare has become mandatory by ensuring better living standards.
  • Introduction of Golden Visa program granted residency to investors who bring in AED 2 million in capital. Over 152,000 of these visas have already been issued.
  • 100% ownership for the investors on their companies
  • Growth of population from 1M to 3.8M since 2000, shows a huge influx of people choosing Dubai.
  • With 24 million people arriving at Dubai, Expo City attracted global audiences.
  • Expo 2020 has boosted interest in real estate after the pandemic era.
  • Moreover, Dubai has seen a significant increase in international investors. For instance:
  1. European investors grew from 2% to 8%
  2. Chinese from 4% to 13%
  3. American investors increased from 0.2% to 2%.
  4. Even high-net-worth individuals from Africa with around 300 arriving each year.
  5. International investors bringing families and making long-term commitments to living and investing in Dubai.
  6. The current prices, around USD 600/ Sq Ft are expected to climb towards their true potential which is closer to USD 5,000/ Sq Ft. Now is the right time to invest, before prices reach those higher levels.
Which is the best to invest in Dubai, off-plan or ready property?

Even though ready properties hold its own benefits, buying off-plan properties offers better protection against market drops, significant capital appreciation, and financial flexibility.

Which is the best area for investment in Dubai?

Two of the mostly preferred and greatly rewarding areas include Dubai Hills Estate and Dubai Creek Harbour. With a proven history these communities are the best advised areas to invest in Dubai.

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