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Friday, March 13, 2015

Investment in Dubai realty market

After 2008 Dubai property market learned a lot from the crisis. Laws and regulations were improved. Property transfer fee has been raised to sideline speculators. Escrow account added another layer of security for investors. The payment to developers is released when the developer presents certificate that certain stage in construction has been reached. This ensures safety of investors from delay and cancellation of project.
Dubai night view

These new laws have brought stability to Dubai property market. Property market again bounced back.  According to Dubai land department Indian investors led the realty investors list by investing 18.123 billion dirham during 2014. The total transactions by Indians totaled 7353 during the period.

Pakistani investors were ranked second as they transacted 5079 times amounting to 7.588 billion dirham. These investors included entrepreneurs, professionals, civil and military officials, overseas Pakistanis and other high net worth individuals. Pakistan, according to wealth report 2013, had 415 ultra high net worth individuals. The average wealth of these ultra high net worth individuals was 120.5 million dollars. After economic recovery in 2014, number of super rich may have gone up.

British investment came third at 9.318 billion dirham. Iran and Canada came fourth and fifth respectively. Investment from Iranians stood at 4.5 billion dirham while from Canadians it was 3.157billion dirham.

The huge interest of Indo-Pak investors is due to following reasons. Investment outlets in home country like that offered by Dubai is lacking. Furthermore realty market in Dubai has been developed and matured since its opening in 2002 to foreign investors.  Secondly the proximity of Dubai to sub continent is another reason for Indo-Pak investors to invest in Dubai. Thirdly Dubai market offers unique opportunity of earning tax free rental income and capital gains.

The total non-Arab investment in Dubai during 2014 amounted to 64 billion dirham through 29,098 transactions. This constitutes more than half investment in the real estate. The balance is expected to remain in favor of non-Arab investors if oil prices remained dip.

Jordan topped the list of Arab realty investor in Dubai. 

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