What signals show the real state of the Dubai market? How to invest in Dubai real estate? In the article you will learn how to choose a real estate with high returns.
The state of Dubai real estate market in 2024
The common belief that the market is overheating due to primary residences is wrong. Demand is indeed outstripping supply, and it's exciting to see the best apartments from developers flying out in a matter of minutes. However, it is important to remember that the secondary market, like a mysterious room full of hidden treasures, is a true indicator of the situation. Secondary housing prices are more realistic as they are dictated by the market, not developers.
Speaking of an overheated market, let's remember 2020. At that time, many people claimed that the market was overheated, and now you can hear similar statements. But let's look at the data: from 2014 to 2020, the Dubai Marina market was falling, and only now are prices starting to recover. The market is always subject to cyclicality, and it is important to understand the fundamental reasons for ups and downs. For example, until 2014, Dubai's economy was focused on the real estate market, which contributed to its growth. The 2019-2020 pandemic was the perfect time to enter the market and those who invested then are now making excellent returns.
The introduction of corporate tax with a minimum rate will only strengthen the economy. Dubai is becoming the new silicon valley, attracting the best talent and companies. The average budget for investment is around $300,000, but deals often exceed $800,000.
How to choose real estate in Dubai?
When choosing real estate, it is important to consider liquidity and profitability. In good projects, rental yields can be as high as 11% and value growth of about 68% per year. However, competition in the market is high and the only way to increase liquidity is to lower the price. Unique properties such as Palm Jumeirah offer not only high growth potential but also steady demand.
Investing in real estate can be compared to buying blue chips on the stock market - it is a safe and conservative strategy. Or you can take a risk by investing in more expensive properties with high capitalization. For example, real estate on Palm Jumeirah, where prices are rising rapidly. Conservative investments, such as studios in Dubai Marina, are also profitable, but at a slower pace. The choice of strategy depends on your character and ambition.
