Foreign investments: Why Indians will be Dubai’s top foreign realty investors

Some developers offer a post-handover extended payment plan wherein an investor could get the keys of the property after paying on average 50% of the price.

The real estate industry in Dubai has become one of the most lucrative, transparent and secure property markets in the world.

The Dubai Real Estate Regulatory Agency (RERA) presented a model of inspiration for Indian authorities to reform their own regulatory framework in 2016.

Dubai’s RERA currently offers the best protection for investors in the real estate sector. So much so, that property developers are deprived of the right to access investors’ money deposited in escrow accounts without permission from RERA, a surveyors’ site inspection and a progress report.

This was a primary draw for Indian investors in Dubai.

Dubai offers 7-8% rental return per annum, compared to 2-3% in most metropolises in the world, which means an investor could recover the entire investment in 12-13 years through lease or rent.

These investments yield higher returns compared to similar properties in metropolitan cities in India. Even with a high dollar rate and the Indian rupee trading low, some of these investment opportunities are unbeatable and can help an investor acquire a high yielding property vis–a-vis investment in out-of-city locations in India.

The entire process of property purchase in Dubai is simplified and does not require a lawyer to complete at any developer’s or government approved Trustee office.

Some established developers offer a post-handover extended payment plan wherein an investor could get the keys of the property after paying on average 50% of the price, leading to a more attractive ROI as high as 15-20%. For example, a buyer could take possession of a two-bedroom apartment that is priced, say, Dh1million (Rs 1.8 crore) by paying just Dh500,000 with the balance to be paid in 5-7 years. He could easily command rent of Dh80,000 (Rs 14 lakh) per annum – that makes it 16% return on investment.

Dubai’s world-class infrastructure, geographical location, frequency of air connectivity and the emirates’ liberal socio-economic policies and political stability make Dubai a natural choice for Indians to invest in their second, third or fourth home.

The recent relaxation in the UAE’s visa policy offers Indian nationals an electronic visa or a visa upon arrival basis their valid US/EU visa.

Indian nationals, who form the largest foreign investor group in Dubai’s real estate, have bought properties worth Dh83.65 billion in the last five years – from 2013 to 2017 – in Dubai’s property sector, according to statistics compiled by Dubai Land Department.

Due to the above reasons, Indian nationals will continue to dominate the list of foreign investors in Dubai’s real estate for a long time.

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