Are Dubai Property Investments Worth It For Indian Investors?

When the time comes to choose between a luxury property located in India & Dubai Real Estate Investment For Indian Citizens, many Indian HNIs seem to prefer the latter. Below we will explain to you that what makes Dubai properties so attractive to Indian investors.

At present, Indian HNIs have a staggering INR. 16,800 crore investment in various realty projects in Dubai, a global financial centre. Dubai saw a surge in Indian Investment in its real estate sector in the first 9 months of 2018.

Dubai Real Estate Investment For Indian Citizens

All this can be attributed to its strategic location, high investment & rental yields, capital appreciation & regulations thus making it an attractive proposition.

Some of the offerings by Dubai’s real estate market are budget to luxury apartments, villas to beach properties, furnished homes & commercial properties.

Rajeev Sood, a software entrepreneur was negotiating for a sea-facing luxury property in Mumbai, at a whopping price of Rs 50,000 per sq ft. But to his luck, just before he was to close the deal, a business trip to Dubai completely changed his outlook. He came to know that he could afford some of the most luxurious properties in Dubai. That too at a lesser price than Mumbai.

These were his words,

“In terms of price point, luxury properties in Dubai are more attractive than any option in Mumbai or Bengaluru. Moreover, no Indian city can match the rental returns in Gulf cities. Add to it the benefits of tax-free returns and attractive capital appreciation. Last, but not the least, is the quality of life in Dubai.”

Property Prices In Dubai

Sood is not an exception when it comes to the prospective real estate buyers in India. Its about changing their minds after being exposed to the property market of Dubai. It is a surprise to no one that Indians are the largest buyers of properties in this city. Every year around 6 to 7 thousand properties are purchased by Indians.

As per a Property Monitor of Gulf report,

“The cost of an apartment in Dubai is Arab Emirate Dirham (AED) 642 (Rs 11,235 at a conversion rate of 17.50) per sq ft in International City; د.إ 846 (Rs 14,805) per sq ft at Dubai Investments Park, د.إ 883 (Rs 15,452) per sq ft at Jumeirah Golf Estates; د.إ 1,257 (Rs 21,997) per sq ft at Mohammed Bin Rashid City, د.إ 1,333 (Rs 23,327) per sq ft at Dubai Festival City, د.إ 1,471 (Rs 25,742) per sq ft at Business Bay, د.إ 1,623 (Rs 28,402) per sq ft at Dubai Marina; AED 2,013 (Rs 35,227) per sq ft at Palm Jumeirah, and د.إ2,383 (Rs 41,702) per sq ft at Downtown Burj Khalifa.

When it comes to HNIs looking for luxury villas, Dubai has better price options as compared to many other Indian cities. Real estate portal Propertyfinder, that did an analysis on the costliest areas in the Emirates suggested,

“That a luxury villa would cost roughly AED 2,604 (Rs 45,570) per sq ft. A property in Palm Jumeirah would cost AED 2,437 (Rs 42,647) per sq ft. While in The Lakes community, it would cost AED 1,369 (Rs 23,957) per sq ft.”

Why Is Dubai Property: A Magnet For Indians

  • Property prices more rational than Indian cities.
  • Rental returns, in the range of seven to 12 per cent, are tax free.
  • Attractive capital appreciation.
  • Hassle-free buying and selling, with no tax liability.
  • A global city with better quality of life.

What Does Dubai’s Real Estate Market Has In Its Bouquet That Lures Indians Away From Their Home Real Estate Market?

Attractive capital values are one amongst those temptations, for HNIs. Dubai also offers rental returns in the range of 7 – 12 %, that is much higher than most global cities.

As per a Propertyfinder report, take for example,

“Jumeirah Village Triangle (JVT) has the highest rental yield for apartments in Dubai at 9.2 per cent. This is despite witnessing one of the steepest declines in prices, by about 12 per cent.”

And in comparison, the rental yields in London are 3.5 per cent, while in Hong Kong it is 2.82 per cent & 2.83 per cent in Singapore.

In addition, Dubai’s tax-free status makes rental income more profitable. No matter whether your real estate purchase is commercial or residential it does not attract any taxes.

And for an already bought property, its owners are not liable to pay additional taxes in the future. This is applicable for having freehold property.

PNC Menon, founder cum chairman of the Sobha Group, brings to notice the fact that there has been a 12 % growth in Indians travelling to Dubai. Post demonetisation around 3 years ago i.e. back in 2016, Indian investors find it difficult to look for options that offer high returns in India.

As per Menon,

“In Dubai, Indian investors can avail of tax-free returns of eight to 10 per cent and a capital appreciation of 20 to 30 per cent annually, as the AED is pegged to the US dollar and is unaffected by currency fluctuations. The RBI’s Liberalised Remittance Scheme allows an Indian investor to transfer USD 2,50,000 (USD 5,00,000 for a couple) legally per year, which can buy them a 2-BHK apartment in Dubai. Registering a property in Dubai is easier, as compared to India. One can automatically get a residence visa, on investing AED one million.”

It is not a surprise for anyone that Indians are amongst the leading foreign investors in Dubai properties, followed by Pakistani, British, Chinese & Canadian nationals.

In other words, HNI’s from both developed and developing nations think that it is a wise decision to invest in Dubai’s real estate market market, if unable to find inviting options in their home state.

Why Indians Will Topple Will Other Foreign Realty Investors? Dubai Real Estate Investment For Indian Citizens.

Some real estate developers have on offer a post-handover extended payment plan. In this, the prospective buyer could get the keys of the property after paying 50% of the closing price.

Dubai’s RERA at present offers the best possible to its investors in the real estate sector. In the absence of permission from RERA, a surveyors’ site inspection and a progress report, property developers are deprived of the right to access investors’ money deposited in escrow accounts.

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