Dubai’s unprecedented incentives draw investment in realty sector

Inayat-ur-Rahman, Gulf Today

Dubai offers huge incentives that encourage residents to invest in the real estate sector, namely, high return on investment, low risk, investing for next generations, ease of substitute in case of default and ownership is better than rent.

This was stated by Walid Al Zarooni, a leading real estate expert and Chairman of W Capital during an exclusive interview with Gulf Today, adding that that the City of Wonders is still the best place for foreigners to live, work and invest.

Al-Zarooni stated that Dubai has a population of more than 3.3 million people with plans to reach 5.8 million by 2040. The emirate is providing high quality infrastructure and attractive legislations that take into account the rights of all parties. The opportunities for investment and trade growth, as well as continuous and renewed government initiatives support the economy and enhance the presence of expatriates. The UAE government new incentives , include the granting of citizenship and golden residency, as well as full foreign ownership of business, up to 100%.

Al-Zarooni realized the top five incentives that prompt residents’ investment in the real estate sector as follows.

High return:  Al-Zarooni noted that real estate investment in Dubai provides one of the highest ROI in the world, for many expatriates in the Gulf region and the Middle East, who prefer to invest in the real estate sector.

He pointed out that investors focus on avoiding weak return due to service fees, slump in rent ranges, or the weak market performance. But Dubai showed a remarkable recovery in the first quarter of this year, and it is clear that this recovery will continue during the coming years boosted by the factors supporting the market.

“Of course, the investors or residents prefer these days to keep their savings in banks  with good interest rates, but the high return on investments in Dubai real estate sector, of about 7 to 8 percent, will be tempting for many residents to buy units, whether to live without paying rents, or own for the purpose of investment or re-renting the units as chances of investment in their home country are scares , in light of the repercussions associated with the covid-19 pandemic,” said Alzarooni.”Dubai economy ,in contrast, is developing gradual recovery thanks to the vaccination campaign that served the vast majority of the population,” he added.

Al-Zarouni believes that the high return will give a rewarding pension in case the resident plans to invest part of his salary in real estate .

 Low risk: The Chairman said that some expatriates investing in the real estate sector believe that investing in a country other than theirs ,may be a risk, due to the different laws.

He noted that the United Arab Emirates has provided the best legislative experiences in the world in protecting foreign investments, providing legal protection, preserving the rights of others and not compromising their ownership. A resident or investor can manage their real estate property, whether selling or completing real estate transactions and paying fees remotely, thanks to high- end technologies.

 An investment for next generations:  There is a wrong belief that say expatriates should invest for one generation ,which is the fathers’ or G1, only. In the UAE where the rules and regulations protect and respect the rights of all generations, buying a property is a good investment for future generations,” Alzarooni said. “Investors can benefit from owning a property even in the future time, “ he added.

 Ease of substitute:  One of the reasons investment in Dubai lure investors is the possibility of quickly finding an alternative real estate investor in case the original investor is unable to complete the process of purchasing the housing unit, whether in installments or bank financing.

“The concerns of finding an alternative investor or refunding may discourage people from investing in real estate, but in Dubai the situation is different in light of the attractiveness of the market and the price movements that tend to be on an upward trajectory,” Al-Zarouni said. “This guarantees the old investor refund the money he paid and the new investor get a new chance of win-win investment as a result of the improvement in the unit price,” he added.

 Owning is better than renting:  Al-Zarooni revealed that the expatriate’s ownership of real estate in Dubai is better than paying high rents. For an expatriate living here between 5 to 10 years, ownership on the basis of monthly installments will be a good option and the rent money will be saved.

By the end of the residency period, the expatriate can sell the unit, the price of which will have already increased, at the market price, and this will make a good investment chance in all cases.