As a result of affordable entry points, attractive financing options, and high demand, property investment in Dubai is booming
Dubai's rental market has grown significantly in the past year. Seeff reports it's been a great time for landlords and investors, with healthy occupancy rates and rental yields ranging from 4% to 8%.
A peek into the Dubai Land Department's latest figures reveals an eye-opening 33.8% jump in property transactions, alongside a 36.7% boost in their overall value. Particularly noteworthy is the rental sector's performance in the third quarter, where there was a 23% increase in activity, and the demand for rentals shot up by 119%. The market for villas and townhouses is also buzzing, with sales up by 34% and a particular spike of 38% in sales of villas on the secondary market.
This growth has placed Dubai on the map as a prime spot for property investment, attracting interest from all corners of the globe. The city's rental market is diverse, catering to the millions of tourists visiting each year with short-term rentals alongside a strong residential sector that sees many tenants renewing their leases.
Property Investment in Dubai: The Current Landscape
The city's mix of pro-investor policies and a lifestyle that's hard to match elsewhere has particularly resonated with South African investors. They are increasingly drawn to Dubai's property market to preserve wealth.
The property market in Dubai is currently characterised by high demand against a backdrop of limited supply. This scenario is likely to continue until the completion of several off-plan developments currently underway. Despite this, there is no shortage of opportunities, with many developments still in the off-plan phase representing prime investment opportunities.
Seeff's recent expansion into Dubai is a testament to the city's growing prominence in the global property market. Under the stewardship of Nombasa Mawela, the licensee for Seeff Dubai, the agency has seen remarkable success and is optimistic about the market's prospects for 2024.
The start of the year has been particularly strong for Seeff Dubai, achieving six luxury property sales in January alone.
The Benefits of Property Investment in Dubai
Despite the weakening Rand, the Dubai property market remains a highly accessible venture for South African investors. The entry-level prices are on par with South Africa’s upper middle class and luxury property sectors, making it a familiar investment scale for South Africans.
Here's a closer look at what makes Dubai an attractive investment landscape:
- Affordable Entry Points: Investments begin at around R2.3 million (AED 450,000), with more expansive new developments starting from ZAR5.5 million (AED1,078M).
- Financing and Payment Plans: Off-plan developments offer attractive financing options, including flexible payment plans tailored for the rental market. This makes it easier for investors to enter the market early and benefit from potential value appreciation.
- Mortgage Availability: Buyers can secure mortgages covering up to 75% of the purchase price, further easing the path to investment.
Property Investment Opportunities in Dubai
Nombasa Mawela points out the multifaceted opportunities for investors, including resale prospects, relocation options to Dubai, or the pursuit of a second passport, all benefiting from the heightened demand from South Africa.
Highlighting specific opportunities, Nombasa recommends considering three new developments for their exceptional value and attractive rental yields:
- Mag 330 in City of Arabia: Offers one-bed units starting at ZAR5.5 million (AED1,078M), with a 50% payment spread over 2.5 years and the balance payable after handover over four years. An anticipated return on investment (ROI) of 14.1% makes this an attractive option.
- Merce House by Ellington in Uptown Dubai: Starts at ZAR 13.4 million (AED2,6M) for a one-bed unit. Requires a 20% down payment with a structured payment plan thereafter. The anticipated rental yield is between 6%-8%.
- Armani Beach Residences in Palm Jumeirah: Begins at ZAR25.9 million (AED5M) for a two-bed unit. A 25% down payment is needed, with further instalments payable over time, offering an anticipated rental yield of 5%-8%.
Nombasa Mawela from Seeff Dubai is visiting Nigeria and Cape Town this month on a roadshow with her team; she’s available for consultations via email at nombasa.mawela@seeff.com or through the Seeff Dubai website.
Whether in person or online, Nombasa will guide you through property investment in Dubai.
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