Dubai's Real Estate Sector Fueled by Overseas Investments
Dubai's real estate sector is experiencing significant growth, primarily propelled by a substantial influx of foreign investment. A recent study reveals that international individuals and companies constitute a considerable 60-70% of freehold property buyers. This overseas investment fuels a dynamic development landscape.
Freehold Property Market Dominated by Foreign Buyers
Two-thirds of all new freehold properties in the emirate are acquired by individuals or entities residing outside the country. Developers currently have an astounding USD 100 billion worth of new projects in progress, showcasing Dubai's robust property market. MAG Group, a prominent property developer, aims to expand its portfolio of new projects to exceed USD 2.72 billion by 2012. The group observes that final homeowners represent a mere 30% of the market, with UAE nationals accounting for a fractional 5%.
Investment Appeal of UAE Real Estate
"Motive for this phenomenon is investing in property in the UAE is seen as safe and rewarding and presently better than investing in bonds or stocks," said MAG Group CEO Mohammed Nimer. This sentiment underscores the attractiveness of UAE's real estate market as a safe haven for investments compared to other asset classes.
Overcoming Challenges and Reaping High Returns
"Despite of many challenges, for example rising costs and shortage of contractors, the real estate sector in the UAE is still one of the most favored investment areas in the country. The return on the investment can reach as high as 40 %, an unbeatable figure,” he added. Despite encountering challenges such as increasing costs and contractor shortages, the UAE's real estate sector remains highly desirable. The allure of lucrative returns, reaching up to an impressive 40%, continues to draw investors.
Sustained Growth Through Foreign Investment
Nimer emphasized the critical role of foreign investment, both from developers and buyers, which accounts for 60-70% of freehold property investment in the UAE's real estate sector. This sustained inflow of international capital is considered essential for the market's continued expansion.
Growing Interest from Emerging Markets
Investors hailing from various countries, including Pakistan, India, and China, along with emerging markets like South Korea and Brazil, exhibit increasing interest in the UAE's lucrative real estate scene. They perceive the country as an opportune location to tap into the flourishing opportunities in the real estate sector.