Dubai – Haven for the Luxury Investor
Dubai is a city of milestones. Within the span of a few decades, this gleaming metropolis that rose out of the desert has positioned itself as one of the leading global destinations for tourism, raising a family, and property investment. But what is it about the city that makes it such a popular choice for so many people? Here are a few important things you need to know about Dubai and why you should consider investing in this thriving urban haven.
It Sits at the Centre of the World
As any real estate professional will tell you, there are only three things to consider when buying property: location, location, location. On that front, Dubai got very lucky by being perfectly positioned at the crossroads between the East and the West. Many of the major cities around the world are only a few hours’ journey from the city, which makes it convenient as a vacation spot and as a waypoint for world travelers. For businesses, this position is especially strategic as they can set up a hub in Dubai and trade with partners across the globe.
A City of Diversity
Dubai is a true melting pot of cultures, with expatriate residents comprising close to 75% of the total population. The vast majority of expats hail from around Asia, though you will definitely run across someone from every continent. Indian and British expats are the largest groups from their respective hemispheres, alongside those from the Philippines and across Africa, the Americas and Europe. In recent years, there has been a rise in the number of Chinese visitors coming into Dubai. Though mostly tourists, many are electing to find a permanent home there as well, an idea that Dubai aims to promote enthusiastically with the recent announcement that it is constructing its very own Chinatown – the largest in the Middle East.
Investment into Dubai has always been strongly encouraged, particularly in the city’s thriving real estate market. Although things did get a bit shaky after the financial collapse in 2008-2009, the market has gained ground again since 2012. New projects are being announced, especially in the lead-up to Expo 2020, a global thought and innovation exhibition held every 5 years that will be hosted by Dubai in its next iteration. The landscape is ripe for investors, both literally and figuratively, and Dubai is making effort to make investment as attractive as possible.
The legal framework of the city is set up to be fair to both investors and real estate developers. The rules and regulations that are in place ensure that neither party can default on its promises and leave the other high and dry.
Adding to that is a new ruling announced earlier this summer that will go into effect by the end of the year – investors into the UAE will be granted 10-year residence visas. This is a landmark announcement for Dubai, where residence visas are typically issued for a duration of 2 years. By increasing the scope of residency to that extent, future residents are guaranteed more stability. This will also lead to a more long-term approach to investment in Dubai, as investors will be able to see their investment mature over a longer period of time. And of course, this is a great incentive for prospective homeowners to take the leap into buying a home in the city.
Another important part of that ruling is that businesses operating within the UAE will be able to have 100% foreign ownership. Under the current rules governing businesses, it is mandatory for every company (except those operating in free zones) to have a local stakeholder. By removing this stipulation, there is much more room for homegrown businesses to come up and for multinational firms to consider making Dubai the site of their head office or regional headquarters.
Speaking of investment, property in Dubai guarantees some of the highest yields around the world. Compared to the 2% or 3% you would expect from global heavyweights such as New York, London and Singapore, Dubai properties produces an average annual yield of approximately 6%, with certain projects pushing into the double digits. If you can make the right investment, it could end up being extremely lucrative. High-end brokerages, such as private client advisory firm LuxuryProperty.com, offer expert advice based on careful market analysis to help you find the investment that will net you the most gains.
One of the great benefits of living in Dubai, and investing in the market, is that there are no taxes. Your capital can grow safely without the hassles of filing any needless paperwork. At the start of this year, Dubai introduced 5% VAT on commercial goods, but the tax has had a fairly negligible effect on costs overall. And for the present, the tax is not applicable to residential property purchases, so investors and new homeowners can breathe easy.
One of the World’s Safest Cities
Anyone living in Dubai can attest to its safety. Thanks to well-trained law enforcement and an efficient legal system, crime rates are low and have been on the decline year-on-year. There are also quite a few gated communities in the city and every building has top-notch security systems installed to keep residents feeling safe at all times. Dubai is also secure on a regional scale, remaining stable regardless of political issues that have arisen in the region. It is the ideal destination for families and singletons alike, whether you are looking to take a vacation or settle down and raise a family.
City of the Future
Dubai has attained the global status it has today in part due to the forward-thinking vision of its leaders. Never one to rest on its laurels, the city always is always looking for ways to innovate, whether in terms of its infrastructure or its lifestyle. Sustainability is one of the key initiatives that Dubai is currently focused on and is an integral aspect of the new communities and architectural projects being designed.
Dubai also has the aim of becoming the world’s first ‘smart city’, seamlessly integrating technology into everyday life to remove the hassles and hurdles typically associated with bureaucracy and to streamline interactions between the city and its residents. It is already well on the way to achieving this goal through systems currently in place to simplify government processes. Driverless trains and trams are a step closer to safer, fully automated public transport and ongoing research in practical AI will add to the growth of Dubai’s technological infrastructure.
Dubai has a knack for dreaming up the impossible and then transforming that into a reality. From the world’s largest man-made island to the tallest building in the world, there is hardly an architectural feat that Dubai will not attempt and ultimately conquer. Indeed, it is already in the process of topping itself by constructing a new tallest tower that will dwarf the current titleholder, Burj Khalifa, by almost 100m (328 feet). Other projects include Dubai Harbour, an offshore destination that will house two of the largest cruise terminals in the Middle East; Dubai Lighthouse, an architectural wonder that will be part of Dubai Harbour; and Ain Dubai, the world’s largest Ferris wheel, which is set to open to the public by the end of the year.