WHY DUBAI - TO RELOCATE & TO INVEST

When selecting destinations for relocation or investment, it's essential to establish clear priorities and have basic criteria for identifying profitable locations. This article examines several cases, suggesting an analysis of the behavior of the world's wealthiest individuals. After all, if they have accumulated wealth, they likely possess valuable insights, and if they have information, why not share it?

GROWTH OF TOURISM AND INFLUX OF WEALTHY RESIDENTS

Dubai consistently ranks among the world's most attractive cities. According to Euromonitor International, a global research firm, the city leads in tourist and excursion visits, attracting 16.8 million people.

In December 2023, Dubai's hotels achieved a record occupancy rate, significantly boosting their revenues. CoStar Group reported that the average daily room rate (ADR) for the month was the highest ever recorded.

In 2023, 4,500 millionaires relocated to the United Arab Emirates, according to a study by Henley & Partners, as the country has become a haven for affluent individuals worldwide. In the capital migration ranking, the UAE placed second after Australia (5,200 millionaires).

“High-net-worth-individual migration statistics are telling. Wealthy families are highly mobile, and their international movements can serve as an early warning signal regarding a country’s economic outlook and future trends. Like the proverbial canary in the coal mine, they alert us to potential dangers as they are more attuned to threats to their wealth and typically have the resources to take corrective actions to preserve their legacies.” 

— Dr. Juerg Steffen — CEO of Henley & Partners — the world leader in the study of capital migration.

MANY FACTORS THAT ATTRACT MILLIONAIRES TO THE UAE:

• Security: a crucial factor, especially in uncertain times, which is why significant private capital flows into the UAE. Dubai offers a stable regulatory environment: the country respects the rule of law and guarantees economic freedom. 

• Taxes: Dubai has some of the world's most competitive tax rates, making it an appealing place for business and residence.

• High-quality medical care: the UAE is renowned for its excellent medical services, attracting numerous international patients.

• Entertainment and luxury: the UAE provides a wide array of entertainment options — from luxury shopping malls and restaurants to premium and business-class real estate and communities.

• Education: over 200 international schools in the UAE offer high-quality education for millionaires' children.

• Year-round resort: the UAE is famous for its beaches, water parks, and marinas, offering recreational opportunities throughout the year.

FOR INVESTORS

Although Dubai is often thought to have developed on oil revenues, its primary income sources are tourism and real estate. UBS analysts, as part of the UBS Global Real Estate Bubble report, have assessed the Dubai real estate market as "not overvalued," with its real value significantly exceeding the current market value — the city is safeguarded against a real estate bubble.

An index exceeding one point signals a bubble threat in the market. If this index approaches 1.5 points, it indicates a potential imminent collapse. In such a scenario, real estate prices and demand may start to decline, potentially leading to losses for investors.

The UBS report indicates that there is no risk of a bubble in Dubai's real estate market. The emirate's housing market remains highly promising, ranking 23rd with an index score of 0.14 — one of the lowest risk levels. 

Dubai is expected to grow steadily over the next 5-10 years. A recent 25% increase in rental prices in some areas of the city reflects genuine demand. Alongside successful cases, several factors contribute to the confidence in the relatively high safety of investments. 

WHY INVEST IN REAL ESTATE?

1.  Capital preservation. By choosing a reliable property, your capital is not only shielded from inflation but can also appreciate in value. For instance, with $1,000,000 in cash and a 5% annual inflation rate, and if real estate prices grow by 7% annually, your real economic outcome will be a 2% capital growth per year. Thus, investing in a dependable asset like real estate will preserve your funds amid rising inflation and increase them over time.

2.  High profitability. The demand for real estate in Dubai is continuously rising, hitting new record highs. In August, 12,000 purchase and sale transactions were completed, marking a 23.7% increase from the previous year. Dubai's market activity remains robust even as supply increases. This year, local authorities have revived several coastal projects that were previously inactive or on hold. Notably, Palm Jebel Ali, which had seen no development for over a decade, is being relaunched in 2023. Jebel Ali is anticipated to experience even greater value growth than Palm Jumeirah, with projections of 45-60%. The interest in this new island is so intense that the sales launch saw a rush due to the high number of buyers.

3.  Passive income. Real estate provides a genuinely passive and reliable income source. UBS notes a 50% rise in rental real estate prices compared to the previous two-year period.

WHY DO YOU NEED A RELIABLE AGENT?

When seeking investment opportunities, an agent's assistance is indispensable. An experienced professional not only saves you valuable time but also helps you discover the best real estate advice and grants access to a vast property database. Purchasing properties through a real estate agent incurs 0% commission as the developer pays the agency. In the secondary housing market, the agent's fee is 2%, but without their help, buying or selling property would not be possible. 

How an agent can assist you:

- Choose the optimal real estate;

- Facilitate reliable money transfers;

- Help with gathering necessary documents and preparing powers of attorney;

- Aid in establishing a legal entity if the purchase is for a company;

- Support in obtaining a resident visa;

- Open a bank account if needed;

- Assist with acquiring keys;

- Manage your property;

- Offer after-sales service.

WHY BUY NOW?

Many are anticipating a market correction, believing the real estate boom will end in the next two to three years. Some investors have been waiting for this since the pandemic, missing significant opportunities, while others have profited well. Although the market has been rising recently, it doesn't necessarily mean that prices will revert to previous levels in the future. Property prices in Dubai are increasing steadily for valid reasons that demonstrate remarkable consistency: the population grows annually (a record 3% in 2023), there's a significant influx of millionaires, and the culture is becoming more westernized. According to the Master Plan for the Development of the Emirate, by 2040, 7.8 million people will be able to live there comfortably. The plan aims for Dubai to become the best city in the world to live.

These evident factors cannot be overlooked: it is highly improbable that even with the increase, prices will return to their former levels. This is supported not only by expert opinions from reputable organizations but also by clear evidence and real examples from our clients.