Indian investors have put in around $1.6 billion in Dubai’s real estate market between 2020 and the first half of 2023.
Indian investors emerged as the top buyers in Dubai’s thriving real estate market for consecutive two quarters last year. Indians, Britons, and Russian investors have been major buyers of commercial and residential properties in Dubai. The property market in Dubai has seen post-pandemic recovery due to pent-up demand from travellers and higher spending by residents.
According to the Better homes Residential Market Report 2023, Indians were the largest investors in the Dubai market in June and September quarters of 2023, beating the UK investors.
The Dubai real estate market saw 28,249 deals in the September quarter, which was 4% higher than in the previous June quarter and 23% more than that in the September quarter of 2022, the recently released report said. Villa and townhouse deals saw a sharp 34% expansion in the September quarter while apartment sales declined 4%.
Realtors say Indians have been a major driving force in Dubai’s realty market as they figure among top three nationalities to buy properties in the Emirate since 2002.
What makes Dubai’s property market attractive for Indian investors?
According to international property consultant Vestian, Indian investors invested $335 million in the first half of 2023, which was higher than $221 million in the same period of 2022.
Citing data from Dubai Land Department, Vestian stated that as many as 123 projects saw Indian investments. The major factors attracting Indian investors are Dubai’s tax-friendly policies and strategic location of the emirate. In recent years, Indian investors have put in around $1.6 billion in Dubai’s real estate market between 2020 and the first half of 2023, according to a report by real estate consultant Vestian.
According to Richard Waind, the CEO of Dubai-based Betterhomes, Golden Visa programme is also one of the factors behind realty investment in the Dubai market. The Golden Visa programme allows foreign nationals to live, work or study in the United Arab Emirates, and enjoy several other benefits.
The Golden Visa programme offers several incentives such as non-requirement of a sponsor, an entry visa for six months with multiple entries and renewable residence visa for 5 years or 10 years.
Dubai remains a key destination for expats across the globe as their population rose by more than 1,00,000 in 12 months until July 2023, says Waind.
In a recent interview, Sobha Limited Chairman Ravi Menon said that Dubai is well positioned for taking on future challenges and maintaining its growth. A number of ambitious projects and government initiatives are driving the growth of the realty sector making it a hub for property investments, according to Menon. The developer is known for large ventures in Dubai and Middle East markets, with an estimated business of $4.5 billion in the emirate alone.
Ravi Menon attributes the realty growth to a strong emphasis on infrastructure development. According to Menon, infrastructure projects such as Dubai Metro and airport expansion would enhance the connectivity and increase the appeal of the emirate for further realty investment.
The thriving tourism and hospitality sectors and business friendly environment of the emirate are key levers of growth. Dubai is known for the luxury and world-class hospitality, which attracts both business and leisure travellers.
Dušan Piksiades, a Sales Manager at proptech Housearch, also believes that Dubai will be one of the most attractive and desired cities when it comes to investment in real estate.
With a stable economy and a projected growth of 4.5%, the UAE has one of the highest predicted economic growths in the next year. This is the main factor which will still keep Dubai “at the top” of the “investment chain”, and bring in more investors, says Dušan Piksiades.
The growing luxury market is also propelling the realty growth in the emirate.
According to Betterhomes Residential Market Report, deals worth $4.83 million were reported in the luxury property in the September quarter, around 44% growth over the second quarter. The launch of high-end off-plan projects like Palm Jebel Ali is set to boost the luxury market.
High rental yields are also one of the main factors for attracting Indian investments in Dubai, as per property consultants. The returns have beaten those in key Indian cities of Mumbai and Chennai.
Munawar Abadullah, the founder and CEO of PropTech and FinTech, PHOREE, says that property prices rose by 18% in 2023 on the heels of a substantial increase in the previous year. Total realty sales hit AED 322 billion ($87 billion) in 2023, which was a 52% increase from the previous year.
The key drivers of growth included a 3.3% economic expansion propelled by the accommodation, transportation, and IT sectors, coupled with an influx of millionaires. Abdullah highlights that Dubai welcomed about 4,500 millionaires in 2023, crediting this phenomenon to progressive reforms that have transformed Dubai into a more cosmopolitan hub