Factors to consider when investing in the UAE

There are several factors to take into account for first-time purchasers who want to invest in UAE real estate, particularly in Dubai. It can be difficult to know where to begin because of the various property types that are available and the distinctive market circumstances in each of the seven emirates. It is essential to make sure your choice for investment is strategically based on the fundamental performance potential.

Investors from all over the world are keen to purchase property in the UAE as the real estate market continues to boom. Home prices have reached the highest levels witnessed since 2016, and this shows no signs of slowing down. Some neighbourhoods are seeing extraordinary price increases, while other less well-known areas offer significant potential for appreciation.

Here is some detailed advice on what first-time purchasers should take into account to receive the highest return on investment.

Recognising the real estate market in the UAE

First-time purchasers intending to invest in the UAE should concentrate on their long-term goals. Understanding variables such as property location, future development plans for the area, and closeness to necessary facilities plays a significant role in selection.

The real estate market in the United Arab Emirates is incredibly distinctive, distinguished by a wide range of property options in the prime and mid-market segments and the potential for large returns on investment. Each of the seven emirates has a unique real estate market that appeals to a variety of buyer types by providing different property types in various price ranges and neighbourhoods.

The UAE's real estate market, like that of every other nation, is tightly entwined with broader market forces, thus it can change quickly. Therefore, it is crucial for potential purchasers to carefully follow market movements. This is necessary to make sure you invest in real estate wisely, capturing the perfect opportunity to buy properties in the ideal places and maximising the return on investment.

The UAE property market stands out for its unique combination of factors, including the relevance of developer brands, amenities like central healthcare and educational facilities that serve both local and diverse expatriate communities, and stable market conditions.

Dubai’s allure is enhanced by well-known locations, attractions, and transportation accessibility. High-end dining, shopping, and services set it apart even further, making life there unlike everywhere else in the area.

Two of the best residential areas in Dubai for great returns
Jumeirah Village Circle

Jumeirah Village Circle in Dubai is one of the most well-liked neighbourhoods in the city.

Due to its global appeal and ongoing development, Dubai has consistently led in terms of ROI; trends that have only grown more pronounced in the wake of the pandemic as the UAE government introduced new and more flexible visa options for retirees, entrepreneurs, artists, and investors, among other categories.

The most well-known neighbourhoods in Dubai, like Palm Jumeirah, Downtown Dubai, and Dubai Marina, may be familiar to those considering purchasing real estate there. Due to their popularity with both visitors and locals, these neighbourhoods have demonstrated a very significant return on investment.

While Palm Jumeirah and Downtown Dubai are more on the upscale side of the city's real estate options, there are also rising mid-market neighbourhoods that purchasers may want to take into account.

Emerging neighbourhoods with low purchase prices and high rental demand, such Arjan and Jumeirah Village Circle, are displaying a substantially higher return each month. Areas nearby that provide modern amenities and infrastructure at more affordable prices are particularly appealing to prospective investors.

Jumeirah Village South is one of the places with the highest growth rates for investment in the middle-tier housing category.

Depending on the size of the property, studio apartments can cost anywhere between AED 450,000 and AED 600,000, while one-bedroom apartments can cost anywhere between AED 600,000 and AED 1 million. Additionally, there are two-bedroom apartments available between AED 1.2 and 1.8 million.

The gross yield for investors in this area has the potential to reach 7.5%. Due to its superior connectivity, advantageous location, continuous hotel construction, the inauguration of the Circle Mall, and a number of additional services, as well as food and beverage alternatives, the neighbourhood is becoming more and more well-known.
Tilal al Ghaf

Tilal al Ghaf, a Majid al Futtaim Properties neighbourhood, holds significant potential for both rental returns and capital appreciation.

Three-bedroom townhouses in this neighbourhood typically cost roughly AED 2.7 million, while four-bedroom apartments cost AED 3.6 million. Standard townhomes and island mansions can be found in the area, with values that can approach AED 100 million.

Investing in the UAE property market calls for a combination of research, professional counsel, and most crucially, market confidence. It is always essential for first-time purchasers to get advice from industry professionals, whether it is for home viewings, legal requirements and costs, or comprehending market dynamics.

Buyers should always take into account supplemental costs, such as maintenance fees and service charges, as these can occasionally come as a surprise to buyers and may have an impact on their Net ROI.

Choosing an option

Start by looking at the options that are accessible, such as ready-to-move-in properties or off-plan projects. Establishing a budget and doing extensive research on the properties' units, costs, and other expenses is crucial. A mortgage or cash purchase of the home should be given some thought.

It is advised that a first-time buyer employ a trustworthy broker. A broker can offer information on different types of properties, give unbiased counsel, and help with the buying process.