Dubai has become one of the most popular destinations for Indians to purchase real estate abroad. There are several reasons why Indians are increasingly investing in Dubai properties:
Attractive Investment Prospects
Dubai’s real estate market has seen tremendous growth over the past decade, with property prices rising significantly. Many market analysts predict continued growth and upside potential for Dubai properties, making them an attractive investment option. Some key factors driving growth in Dubai real estate include:
- Expo 2020 and other major infrastructure projects leading to increased economic activity and demand for housing
- Ongoing expansion of business and tourism sectors
- Government initiatives to attract foreign investors like relaxed ownership laws, long-term residency visas
- Growing population and households seeking homes in Dubai
Investing early on in Dubai’s growth cycle provides Indian investors the chance to benefit from capital appreciation in the coming years.
Strong Returns on Investment
Dubai properties have delivered strong returns on investment in recent years, ranging from 8-25% per year based on location and asset class. Given the supply-demand dynamics, rental yields in both residential and commercial assets are quite attractive as well.
Many luxury properties are purchased on a cash basis rather than mortgage, allowing buyers to realize the full benefits of capital growth and rental yields tax-free as there are no capital gains or income taxes in Dubai.
Safe Haven for Wealth
Dubai is seen as a safe, stable jurisdiction for parking hard-earned wealth, especially by High Net Worth Individuals (HNWIs) from India. They see Dubai as less risky relative to certain assets classes in India or even global markets.
There is minimal crime and strict security measures in Dubai. The government strongly supports the real estate sector as well, aiming to attract foreign investment. All these factors make Dubai property ownership appealing for wealth protection.
Visa & Residency Benefits
Purchasing property worth over AED 1 million entitles the buyer to a 3-year residency visa in Dubai. This offers the flexibility of having a second home in an expatriate-friendly environment and tax-free income.
Property investment also aids in work permit and company ownership procedures in Dubai. These benefits attract businessman and investors from India looking to expand in the Middle East.
Lifestyle Goals
Many urban Indian professionals and families aspire to own a second home in international destinations. Dubai offers luxury amenities and comforts close to home.
Beachfront homes, golf course facing villas, penthouses with sea views or marina facing apartments – Dubai’s extensive options cater to lifestyle goals which Indians have while buying vacation homes abroad.
The city’s shopping festivals, dining scene, sporting and music events provide the premium experiences one can enjoy by having a property in Dubai.
Access to International Education
Dubai has a number of reputed schools offering international curricula like IB, American, British, etc. Indian parents purchase property in the emirate to secure admission for their children in such schools.
Home ownership allows children to enroll in schools easily as well as take advantage of lower fees for resident students. This motive is also driving property purchases by Indians in Dubai areas near popular schools.
Low Purchase Costs & Taxes
Although rising, property prices in Dubai are still lower compared to other global cities. 2-3 BHK apartments are available starting AED 800,000 in developing areas to AED 5-6 million in prime locations. Villas start from AED 3-4 million.
For what Indian buyers can purchase in Mumbai or Delhi, they are able to invest in significantly more spacious and luxurious properties in Dubai. There is no equivalent Mumbai house tax or Delhi property tax in Dubai either.
Easy Financing Options
Many Indian banks have presence in Dubai, catering specifically to non-resident Indians. They offer easy mortgages on property purchases at competitive rates. The mortgage market is well regulated.
NRIs can secure home loans covering up to 80% of the property value. The balance amount can be paid through own funds or borrowings in India. This makes Dubai properties affordable for mid-income Indians as well.
Flight Connectivity with India
Dubai has direct flights to all major Indian cities through Emirates, flydubai, Air India and other carriers. The flight time is only about 3 hours.
Ease of travel between the countries due to frequent flights and visa-on-arrival for Indians allows convenient transit to Dubai homes. Many buyers consider connectivity as a crucial factor influencing property purchase.
Political Stability
Dubai offers political and economic stability being part of the UAE federation. There is minimum risk of adverse regulatory changes like higher property taxes or ownership restrictions for foreigners. This is a major positive for Indian investors.
Transparent property registration system, secure ownership rights and absence of corruption add to the sense of stability for Indians seeking investment opportunities abroad.
Currency Rate Stability
The Dirham and Indian Rupee exchange rate has remained stable over many years without much fluctuation. This suits Indian property buyers as there is minimal currency risk involved.
Many buyers can purchase property by transferring Indian Rupee funds with peace of mind knowing the currency exchange risk is muted in the UAE.
Summary of Key Takeaways:
- Dubai offers high investment growth potential supported by major development projects.
- Strong returns on investment driven by property value appreciation and high rental yields.
- Dubai real estate provides safety and stability for parking hard-earned wealth.
- Owning property provides visa, residency, education and lifestyle benefits to Indians.
- Lower purchase costs, easy financing options and flight connectivity are other attractions.
Conclusion:
A confluence of socio-economic factors like expatriate-friendly environment, stability, connectivity and lifestyle make Dubai an attractive overseas property destination for Indians. Investors eye strong returns and wealth protection by owning Dubai real estate. The market looks poised for continued growth given improving demand drivers like Expo 2020. Dubai properties cater well to the needs of Indians seeking international assets.
Frequently Asked Questions:
Q1: Which areas in Dubai are preferred by Indian buyers?
A: Popular areas include Downtown Dubai, Dubai Marina, Palm Jumeirah, Emirates Hills, Arabian Ranches, Jumeirah Golf Estates, Jumeirah Beach Residence.
Q2: What is the average price per square foot for a residential apartment?
A: In prime locations like Dubai Marina or Downtown, prices range from AED 1,200 – 1,800 per square foot. In peripheral areas, prices can start from AED 800 per square foot.
Q3: What are the major additional costs involved apart from the sale price?
A: Additional costs include 4% registration fee, agent commission if selling, mortgage processing fee if taking a loan, service fees for utilities like cooling, maintenance fees for common areas.
Q4: How much rental returns can an investor expect from a residential property?
A: For apartments, approximate yields are 7-9% depending on location. Villas can earn 4-7% yields. Commercial assets earn 8-12% yields.
Q5: Can non-resident Indians obtain a home loan easily in Dubai?
A: Yes, many Indian banks like SBI, ICICI, HDFC provide home loans specifically for NRIs buying property in Dubai. The process is fairly simple.
Q6: What are the tax implications of owning a Dubai property as an NRI?
A: There are no capital gains, rental income or wealth taxes in Dubai. Only VAT of 5% applies on sale and rents. NRIs enjoy full tax benefits.
Q7: Does an investor need to visit Dubai to complete a property purchase transaction?
A: It is recommended to visit at least once during the initial buying process. Subsequently, a power of attorney can be issued to complete formalities.
Q8: What is the minimum down payment required for a home loan on a property?
A: 20% of the property value is required as the down payment for dubai home loans. The loan amount can cover up to 80% of value.
Q9: Are rental incomes from Dubai properties freely repatriable for NRIs?
A: Yes, the rental amounts can be fully repatriated out of Dubai through the UAE banking system after paying utility bills.
Q10: Are there any restrictions on foreigners regarding how many properties can be purchased in Dubai?
A: There are no restrictions on the number of properties. Foreigners can buy as many units as they desire after fulfilling eligibility criteria.
Q11: What are the costs associated with selling a property in Dubai later?
A: Selling costs include 5% agent commission if selling through a broker, 5% Dubai Land Department transfer fee, approx 1% trustee fees.
Q12: Can property in Dubai be purchased in joint names of husband and wife?
A: Yes, Dubai properties can be registered in joint names. The ownership structure can be 50-50 or as per the buyer’s preference.
Q13: How transparent and reliable is Dubai’s property registration and ownership system?
A: The system is very transparent and reliable with title deeds properly recorded and stored. Dubai Land Department regulates the sector.
Q14: Do Indians purchasing property in Dubai get residence rights?
A: Yes, crossing a minimum threshold of AED 1 million purchase grants 3 years residency visa under UAE property visa rules.
Q15: Is a power of attorney (POA) required for managing Dubai property affairs?
A: A POA is recommended to facilitate management, rent collection, utility payments, tenancy contracts etc while the owner is abroad.
Q16: Are luxury amenities like gyms, pools etc. common in Dubai buildings?
A: Most projects have extensive amenities like pools, gyms, parking, lobby areas. Luxury buildings also have gardens, play areas, retail stores.
Q17: How quickly can an investor expect to start earning rental income post-purchase?
A: If purchased ready property, rental can commence within 1 month. For off-plan, occupancy certificate takes 6-12 months after handover by developer.
Q18: Can Indians resident in Dubai obtain home loans from Indian Banks?
A: Yes, resident Indians can also obtain home loans from most Indian banks in Dubai on same terms as those living in India.
Q19: Do Indian schools in Dubai offer lower tuition fees for resident students?
A: Yes, most Dubai schools classified students as resident or non-resident for tuition fees purposes based on visa status.
Q20: Which currency is better for an NRI to purchase property in Dubai – Dirham or Rupee?
A: Dirham is better as it avoids currency fluctuation risks. However, tranferring funds from India requires good exchange rate timin
