Dubai’s real estate market has been outperforming major Global cities like New York and London in recent years, driven by a combination of factors like strong economic growth, high investment yields, and favorable government initiatives.
Dubai’s real estate market saw a significant recovery starting in 2021 after the pandemic, with property prices rising by up to 20% in certain areas by 2023. This is largely attributed to factors like the city’s positioning as a business and tourism hub, and its relatively more affordable property prices compared to global cities like New York and London.
According to Dubai Property Market, 80% of all real estate sales in Dubai were paid in full in 2022.
Although, London and New York market has experienced more modest growth, particularly in 2023, the overall growth is estimated to be 2-3% in London and 5-6% in New York which is much lower than in Dubai. London and New York’s real estate market has faced challenges from economic uncertainty, and high taxes on high-end properties.
The new market research reveals that Dubai’s property price ranges to an average of $4,750 per square meter whereas in London, it raises up to $10,598 and $15,166 in London.
Dubai: A Magnet for International Real Estate Buyers
Dubai has become a magnet for international real estate investors, with many seeking tax-free investment opportunities and the city’s relatively low property prices. Dubai’s freehold property laws, which allow foreigners to fully own property in certain areas, have contributed to this growth.
According to Arabian Business, Dubai has seen double-digit price increases, especially in the premium locations. Also, the UAE government has introduced several initiatives to make Dubai a more attractive place for foreign investors.
These include long-term residency programs (Golden Visa), 100% foreign ownership of businesses in certain free zones, and the DIFC freezone offering a tax-free environment for business operations. These incentives encourage both individual and institutional investors to invest in Dubai’s real estate.
With the government’s high focus on world-class infrastructure development, showcasing mega-events like Expo 2020,and mega projects like Dubai Creek Tower, and the new global hub developments in Dubai South, contributes to a booming real estate market in Dubai.
Dubai is also known for its political stability, safety, and security, which is reassuring to international investors and residents to live and settle in this place. Further to it, the low crime rates in Dubai makes it an attractive choice for those looking for stability.
While London and New York are still significant global real estate markets, Dubai’s combination of growth, lower entry costs, and attractive returns has increasingly drawn investors in recent years. London and New York has faced periods of political and economic uncertainty, crime in certain areas and the high cost of living has deter some investors.
London and New York’s tax environment is similarly burdensome, with higher stamp duties (particularly on foreign buyers), capital gains tax, and annual taxes on high-value properties. These factors also contribute to making them less appealing for some investors.
For investors seeking both consistent rental income and capital appreciation, Dubai’s real estate market provides an unparalleled opportunity.
In conclusion, Dubai’s real estate market has shown a huge growth, outperforming global giants like London and New York in several key areas. The city’s favorable tax policies, tourist-friendly location, and investment-friendly environment have attracted both local and international buyers, contributing to its impressive performance. Additionally, Dubai’s continuous development of world-class infrastructure, along with a growing demand for luxury properties, has positioned it as a leading global real estate hub. As a result, Dubai has attainted it’s status as an increasingly attractive alternative to more traditional markets, offering higher returns on investment and a dynamic landscape for real estate growth.
Source: Arabian Business
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