Investing In Dubai Real Estate: Where And What To Buy

Your trusted realtor just told you to buy off-plan in Dubai, and you’re seriously considering it. By all indications, real estate is all systems go in this market.

In the last quarter of 2023, a report by the global consultancy firm Knight Frank revealed that 411 homes worth $10 million or greater were sold in Dubai. This was higher than the number of super-prime homes that changed hands that quarter in the rest of the real estate hotspots the company tracks.

In 2024, the number of sales involving ultra-luxe Dubai homes worth at least $10 million appears to be plateauing. However, this may be more a function of dwindling supply than waning demand.

Dubai real estate prices are expected to remain on their current upward trajectory. Moreover, this sentiment doesn’t apply only to the super-prime segment. Property prices in Dubai are predicted to increase five to seven percent in 2025.

One of the reasons for the popularity of properties in Dubai is the value for money they provide. Think of it this way. The money you can use to buy a small apartment in New York, Hong Kong, or Singapore may be enough to get you a good-sized, well-appointed villa in an excellent neighborhood in Dubai.

If you have made up your mind to invest in Dubai real estate, a couple of decisions must be made. First, where should you buy? Second, what type of property should you choose?

Where to Buy

If you’re buying property for investment purposes, you intend to eventually flip or lease it. Therefore, your choice of residential district in Dubai depends on your market: Who do you wish to sell or rent to?

Luxury

If you plan to sell or rent to those who expect nothing but the best in everything, look into the luxury districts of Dubai. In other words, invest in the most expensive neighborhoods.

Three districts immediately come to mind. They are Palm Jumeirah, Dubai Marina, and Downtown Dubai.

Palm Jumeirah is an obvious candidate. First, it is a human-made island and a well-executed one at that. It’s shaped like a palm tree, thus the name.

Before its construction, it was also publicized that it would add miles of coastline to Dubai (note: it’s 35 miles or 56 kilometers), which meant the world looked forward to how the project would turn out. The extensive publicity that ensued only heightened the anticipation.

The attraction is clear. The fronds are gated communities, the trunk and the crescent have luxury hotels and resorts as well as upscale amenities and facilities that make everything conveniently accessible and available to Palm Jumeirah residents.

The homes in the gated communities are on the beach, and most have their private stretch of beach and gorgeous sea views. The villas also typically have their own private pools.

Families

If you want to build a home for families, consider investing in a villa in Jumeirah Village Circle, Arabian Ranches, Dubai Hills Estate, and Dubai Silicon Oasis. By the way, Dubai Hills Estate and Dubai Silicon Oasis are also home to some ultra-luxe residential properties.

Jumeirah Village Circle is a superb option for families putting down roots in Dubai because of its family-friendly amenities, including the Circle Mall. One of the highlights of this neighborhood is the pocket and community parks, where people can jog, play in the shade, and enjoy green spaces.

Singles and Couples

Singles, couples and young professionals need a place in the city center close to public transportation, their places of work, and the city's best entertainment. Downtown Dubai and the Dubai Marina obviously fit the bill, and thereal estate companies in Dubai designed these neighborhoods for the up-and-moving crowd. However, Business Bay remains one of the most popular areas for professionals working in Dubai.

Business Bay has restaurants, shopping, and entertainment – virtually everything you can ever want and need as a young professional working in Dubai. For everything else, you can easily venture out of the community through the efficient and accessible public transportation network. It’s very close to Downtown Dubai but much quieter, and residents can enjoy a less frenetic pace of life here than in the neighboring district.

What to Buy

Your primary choices boil down to apartment versus villa. Consider the following when making your decision:

Villas

Villas proved their resilience during the pandemic, and people have taken note of the lessons that grim period in history taught the world. If possible and they could afford it, people would prefer to live in a villa that could provide them with a relatively bigger, private space that would make lockdowns and isolation pass more pleasantly.

The data supports this. After the pandemic, villa prices bounced back faster than apartment prices. Additionally, the ValuStrat Price Index shows villa prices increase at a much brisker rate than the prices of apartments.

Investing in a villa has its disadvantages, of course. Villas require a larger upfront investment, which can be a barrier for some investors. Bigger spaces also mean costlier and more time-consuming maintenance.

Since villas are more expensive, they may move less slowly, especially during market downturns. They also tend to be less “rentable” than apartments.

Apartments

Apartments are easier to rent out because they are a better fit for singles, couples, and small-family households. Villas, meanwhile, typically only fit families. As such, apartments are the practical choice across more market segments. While people would prefer to live in a villa, not everyone could afford to do so or realistically move into one.

The lower prices of apartments relative to villas also mean they move quicker than the latter. This can come in handy when you need to liquidate your investment quickly.

Apartments are also less costly and easier to maintain than villas. The owner associations maintain the common areas, so you only need to take care of what lies behind your door and between your walls.

That said, apartments do tend to accumulate service charges from owner associations. Your apartment must pay its share of the building’s or development’s maintenance fees, utility bills, and other expenses incurred for the upkeep of shared spaces. These costs could add up and eat into your rental profits.

Additionally, apartment rentals can be highly competitive in saturated markets. This high level of competition can pull down prices and slash your profits.

Finally, as mentioned earlier, apartments typically do not appreciate as quickly as villas. Therefore, apartments may not be the best option if your business model entails investing in property primarily for capital appreciation.

Investing in Dubai Real Estate

Dubai is one of the world’s hottest and top-performing real estate markets. People with extra income flock to Dubai to buy property because they can get “more house for the money” here than they can anywhere else.

If you’re investing in Dubai real estate, carefully consider where you will invest. This depends on your market. You must also decide whether to invest in a villa or an apartment.

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