Acquisition of real estate for investment purposes is a reliable way to obtain stable passive income in the long term. Such a direction of investing money allows an investor to form a capital sufficient not only to pay current expenses, but also to ensure its welfare in the foreseeable future.
A distinctive feature of the acquisition of real estate compared to other investment instruments is the low risk of this method of placing capital.
Preservation and augmentation of money in the real estate market of Dubai
The possession of investment property in Dubai allows to count on a stable income not only in the short term, but also in the long term. Today, the emirate is a stable, mature and at the same time rapidly developing platform that attracts investors and buyers both from the domestic market and from abroad.
The reasons for entrusting their savings to the real estate market of the emirate are more than enough: it is the continuously growing economy of the region, and a stable exchange rate of the national currency, and a preferential tax regime that presupposes absence of income tax and transactions with residential real estate, as well as the highest level of development of transport and socio- household infrastructure, providing an unrivaled standard of living in the emirate and bringing Dubai closer to the world’s largest megacities in terms of quality of life.
According to local and foreign investors, the formation of an investment portfolio based on real estate in Dubai or other emirates allows to count on a decent life for many years due a stable income. An annual survey conducted by the research firm YouGov showed that 40% of UAE residents (both citizens and expats) intend to purchase property in the UAE during 2018.
Speaking about the potential of the real estate market in Dubai, it is worthy to mention the economic power of the emirate. In the latest annual report of the IMD World Competitiveness Center on economic indicators, Dubai was in first place in the Arab world and the fourth place in the global ranking. In the study, Dubai was compared with 63 other cities in the world on the basis of 346 different indicators. The authors of the report noted the high growth of employment, GDP, low unemployment among young people and other achievements.
According to the Statistical Center of Dubai, the real GDP of the emirate for the results of 2017 amounted to 389 billion dirhams, which is 2.8% higher than the figure of the previous year. According to analysts, this growth of 72% was provided by the contribution of strategic sectors of the economy – primarily the transportation and storage sector (18.5%), as well as the wholesale and retail trade sector (8.3%). One of the main engines of economic growth in Dubai is the real estate sector. The contribution of this industry to the real GDP of the emirate in 2017 was 7.1%, or 27.6 billion dirhams.
Important for investors is the fact that the economy of Dubai is diversified in such a way as to effectively reduce the dependence of the emirate on oil production and exports. The revenues to the budget due to the export of oil and gas today are less than 5%, whereas most of the income is generated from non-oil sectors of the economy, in particular, transport, tourism, trade and real estate.