Dubai’s residential real estate sector is one of the most developed segments of its economy, represented by a wide range of properties in different city areas and at different prices. The demand for housing in the emirate is formed mainly by visitors – migrant workers, company owners who came from abroad, freelance artists who decided to settle in an exotic country on the seashore, etc.
What is the Dubai housing sector?
Until recently, most expatriates were only interested in renting housing. But today, buying apartments in Dubai is also of interest to this category of residents, which has led to the dynamics of market development.
When Dubai authorities allowed foreigners to purchase property in certain city areas, the emirate attracted many migrants. Without citizenship or clear plans for the future, these people mostly preferred living in rented apartments. The only exceptions were foreign investors who purchased housing for profit. However, after a while, the situation changed.
This is partly because many expats have been living in Dubai for several years and do not intend to leave, and some have even managed to start families and children. This is partly due to changes in the rental market – a few years ago, the tenant had to pay the entire amount for the year in advance (which significantly limited his ability to save), but today, many owners agree to accept checks quarterly or even monthly.
As a result, more and more expats are deciding to buy their apartments in Dubai. And they can do it thanks to Dubai Prestige real estate agency in 2024.
Is it possible to make money investing in Dubai housing?
Although today, the Dubai real estate market is quite mature, and government legislative initiatives have significantly reduced dangerous speculative activity in the sector, the emirate remains one of the most dynamically developing areas in the world. This also applies to the rental market.
Although more and more foreigners are interested in buying apartments in Dubai as an alternative to rented housing, the proportion of renters is still high. At the same time, today, there is a tendency in the city to move from expensive central areas closer to the outskirts, where new micro-districts are being actively built.
In areas such as Jumeirah Village, Dubai International City, IMPZ, Al Qusais, etc., buying and renting housing is cheaper, and apartments and townhouses are being built in large quantities. The cost of annual studio rent here varies from 25,000 to 55,000 dirhams, and the rent of a 1-room apartment ranges from 30,000 to 75,000.
Thus, from an investment point of view, residential real estate in Dubai – especially studios and 1-room apartments – remains among the income-generating assets one can invest in. On https://axcapital.ae/ there is plenty information about real estate in UAE and many property options you can choose from.
Hospitality and tourism industry
The investment attractiveness of the Dubai hotel industry is directly determined by the dynamics of development and potential of the emirate’s tourism sector. Today, it is the 4th most visited city in the world, attracting more than 15 million foreign visitors to its hotels yearly. As a result, the city’s number of rooms is constantly expanding.
Thus, according to the Emirates Department of Tourism, the city’s room supply increased by 4% and amounted to more than 107,000 units. At the same time, today’s average hotel occupancy level is 88%, which exceeds even the global average, and at the regional level, Dubai is the undisputed leader in the industry.
Among the main features of the emirate’s tourism industry are the following:
– Stable increase in tourist flow;
– Diversity of destination markets;
– Large government investments in the sector;
– Rapid development of related industries – retail trade, restaurant business, entertainment industry;
– The presence of large hotel chains and world-famous brands on the market;
– Availability of equipped beaches and duration of the tourist season;
– The presence of unique attractions (the tallest building in the world, artificial islands, etc.);
– Status of the most popular family tourism destination in the region.
In this regard, investor interest in the hotel sector of Dubai is growing, where, in addition to standard rooms and suites, it is possible to purchase serviced apartments.
Advantages of a hotel room over an apartment
Passive income. Unlike standard housing (an apartment or a villa), an operator controls a hotel room, from attracting guests to replacing damaged furniture. On the one hand, this somewhat reduces the potential profit of the number of owners. Another is that it allows you to count on completely passive income.
Help from professionals. Another advantage of using the services of a hotel operator is their professionalism. This is an experienced team of specialists who know how to get maximum profit, attract the maximum number of guests, cope with temporary difficulties, etc.
Often, businessmen who open mini-hotels and are forced to learn all these intricacies themselves suddenly realize that they don’t know half of everything that would help get the business going. And it’s too late to turn to the help of hotel operators – they are rarely interested in small hotels. If we talk about renting out an apartment, competing with hundreds of other offers will be even more difficult.
Brand fame. One should not discount that most hotels in Dubai operate under famous brands, which guests trust more than unfamiliar names. And in the housing market, you are a stranger.
Personal use. Finally, the room owner can use it for personal purposes (usually about two weeks a year). This will allow you to stay at one of the most popular resorts in the world every year without thinking about how to rent housing or how much to spend on a hotel. In the case of an apartment, you cannot kick out a guest for a couple of weeks because you want to take a break from business – the legislation of the emirate will not allow it.
