There’s no doubt that investing in property is a smart move, especially as property is a valuable commodity and is backed by extremely promising data relating to future price rises, not to mention recent price rises which existing investors have already enjoyed.
However, all investors must consider the location of any property they wish to purchase. Specifically, how the location will appeal to current tenants for buy-to-let investments, plus what the area has to offer your investment over the longer term. After all, if the location isn’t somewhere buyers or renters will want to live in, then this will be reflected in the rental yield and the overall property value.
Although things look rosy for the UK property market at the minute, it’s impossible to ignore the thriving property scene in Dubai also, where Thirlmere Deacon has a location alongside our London office.
If you’re yet to consider purchasing a slice of the Middle East via one of our Dubai apartments, here is everything you need to know to help you make an informed investment decision.
Dubai: An Overview
Located along the northern tip of the United Arab Emirates, Dubai was originally established as a fishing village in the 18th century, before its strategic proximity to Iran made the city a haven for trade. The most notable point for its economy was Dubai’s oil period in the 1960s, which saw the city’s population grow by over 300%.
Today, Dubai has a population of just under 3 million residents. Its economy now has a healthy mix of industries including wholesale, retail, transport, logistics, banking, manufacturing, construction, real estate and tourism.
Dubai is famous for its year-round sunshine, innovative architecture and being a hub for the wealthy elite. Home to the tallest building in the world, the Burj Khalifa, and even its own man-made islands, Dubai is a city that’s proud to be at the forefront of cutting edge technology and innovation.
For property investors, Dubai’s history and current status alike paint the picture of a city that has rapidly transformed in recent years. But with over 1,500 major freehold developments currently underway, it’s clear that the best is yet to come for the city. So, investors should definitely keep this in mind when thinking of their long term plan.
Quality Of Life In Dubai
Do people actually want to live in Dubai? – This is a question any investor must consider since as a physical structure, property cannot be moved if the area isn’t set to increase in value or even if the area is undesirable.
Thankfully, Dubai scores high on Numbeo’s quality of life score, which measures aspects such as purchasing power, safety, health care, cost of living and property price to income ratio.
In particular, Dubai’s safety index score was rated 83.69 out of a maximum 100 points as of April 2022. This is compared to safety index scores of 46.69 in London, 38.09 in Birmingham, 53.84 in Glasgow and 48.71 in Nottingham throughout the same period.
Elsewhere, Dubai is attractive due to its high wages, zero income tax, low childcare costs, political stability and the wide range of amenities the city has to offer. It’s also worth noting that several of the country’s laws relating to personal freedoms have also been relaxed in recent years, and there are now more visa types available for the UAE than ever before.
House Prices In Dubai – Average Sale Prices 2022*
Business Bay – 2,764,945 AED (£592,117)
Dubai Creek Harbour – 3,467,888 AED (£742,124)
Downtown Dubai – 5 217 000 AED (£1,116,646)
Dubai Land – 885,000 AED (£189,524)
Dubai Marina – 2,300,000 AED (£492,197)
Jumeirah Village Circle – 1,329,000 AED (£284,336)
**Source – Property Finder (Based on the cost of 3 bedroom completed apartment Feb-April 2022)
When looking at average property prices in Dubai, it’s good to hone in on the specific area of the city you are interested in purchasing since different areas can vary dramatically in value.
Out of the most notable areas of Dubai, unsurprisingly, Downtown Dubai has the highest property sale price on our list, averaging £1,116,646. For those unfamiliar with the area, Downtown Dubai is at the heart of the city’s attractions and is home to the likes of the Burj Khalifa, The Dubai Mall, Dubai Aquarium & Underwater Zoo and Dubai Opera. Plus, several residences and hotels, including Manzil Downtown By Vida, Vida Residences Downtown (Emaar), BLVD Heights Downtown (Emaar), Ramada By Wyndham Downtown Dubai and Address Downtown.
However, the variation in price points, even with our handpicked lists of Dubai locations, shows there is flexibility for investors of different calibres, not to mention commitment levels, with Dubai Land averaging £189,524 for the same specification. Likewise, it’s also possible to toggle the property type and number of bedrooms depending on your investment criteria.
Investors should also note that In 2021, the average house price in Dubai jumped by 17%. Throughout the same year, 84,772 individual property transactions were recorded, totalling AED 300 billion. When you factor in these figures reflect a point in time when the world was still in the midst of a pandemic, it doesn’t make for bad reading at all! In fact, events such as Dubai Expo 2020, which happened during the tail end of 2021 through early 2022, have only sought to strengthen the city’s economic outlook in recent times. All of which then reflects positivity in house prices and indeed, achievable rental yields.
Dubai Rental Yields
One of the top questions for buy-to-let investors is whether or not they will attract a healthy rental yield. Although we always encourage investors to take a long term approach, in the short term, your rental yield will need to cover your initial outlay and hopefully generate a profit in the meantime.
In 2021, Dubai rental yields averaged the highest of any global city, coming in at 9.19%. So, when it comes back to the question of ‘is it worth buying a property in Dubai?’ – the short term outlook certainly looks promising. Backed by generous price increases of property values, Dubai should be a strong contender for any would-be or existing property investor alike.
Rental yields are high in Dubai for a number of reasons, but mainly due to the build standard being of excellent quality. Remember, Dubai is a relatively new city, especially where its high rise apartments are concerned. With exquisite materials used throughout living areas, luxury amenities in the building and unbeatable locations – property Dubai ticks every box. As there’s something for everyone, it’s no wonder investors are choosing the city to invest in, and, likewise, why tenants are moving here for work.
In Summary: Should I Buy Property In Dubai?
The question of whether you should make any investment really comes down to your individual circumstances, overall investment goals and the advice of any financial or wealth advisors.
That said, in terms of what property in Dubai has to offer investors, there’s plenty to get excited about. The city is a hub for innovation, and its economy is thriving. The standard of build quality is tailored towards the luxury end of the market yet has far lower entry points for comparable build standards and central locations than cities such as London.
People (i.e. potential tenants!) want to live in Dubai due to the work opportunities, lack of income tax, higher salaries, lower childcare costs and low crime rates. So, any investors looking to cater to the Dubai buy-to-let market wouldn’t need to work hard to ‘sell’ their property or the location, as Dubai will do that on your behalf.
Buy Property In Dubai – Reserve Business Bay Apartments From Just 32,000 AED (£6,845)
Imagine being able to reserve a property in a city that boasts average rental yields higher than London, New York or Los Angeles, built to luxury specification in a central location, all for just £6,845?
It just wouldn’t be possible without the help of a time machine in the above cities! Yet, that’s exactly what we’re offering our investors here at Thirlmere Deacon with our Business Bay Dubai apartments. With a projected ROI of 8%, you can secure your apartment for just a 30% deposit today.
Call our team in London on +44 (0) 2039507939, or to reach our Dubai office call
+971 (0) 4 818 7277 to find out more. Alternatively, please drop us a message, and we’ll get back to you.