Reasons Why NRIs Are High On Dubai Real Estate
In the first half of 2016, Indians invested Rs 13,600 crore ($2 billion) in Dubai's real estate, states the Research and Real Estate Studies Wing of the Dubai Land Department (DLD).
According to the land department, Indians are on the top of the list of foreign investors who bought real estate in Dubai in the first three quarters of calendar year 2015.
Indian investors, especially non-resident Indians (NRIs), were ahead of investors from the UK, Pakistan, Iran and Canada.
Data of the last four years show that the investment by Indian investors has gone up tenfold. This made Sumansa Exhibitions bring back the Dubai Property Show to Mumbai. Last year, the show collected around Rs 740 crore to be invested in Dubai's realty.
A look at what attracts NRIs to invest in Dubai's real estate:
- While Dubai offers excellent infrastructure, properties here are generally less expensive than prime properties in, say, Mumbai or Delhi. By owning property in Dubai, real estate investors can access more amenities than they would in Delhi or Mumbai at a lower price. Dubai also offers a great social infrastructure. For instance, if an investor spends Rs 6.8 crore (USD 1 million) to buy a 21 sq m unit in London, then for the same price he can purchase around 145 sq m unit in Dubai. The average ticket size for important locations in Dubai, including Dubai Marina, Business Bay and Dubai Downtown, varies between Rs 3.35 crore and Rs 6.69 crore.
- Owing to its proximity with India, NRIs consider Dubai their second home. Dubai has a large population of Indians working in the city. They consitute 40 per cent of the city's population. This makes investing in property in Dubai a wise decision.
- As has more of a tax-free regime when compared to India, investing in property there helps NRIs save on taxes.
- Dubai has norms that are favorable to NRIs who prefer to rent our properties. These norms are more skewed in favour of landlords which makes it is easier to evict tenants, if need be. Rental yield is also higher than in India.
- Given the huge investment base that already exists, real estate developers in Dubai attract more Indian buyers with attractive discount schemes and discounts. Investing in Dubai assures rental returns varying between 7 and 12 per cent.
- The regulatory framework in Dubai has improved, especially after the financial crisis of 2007-08. This has instilled more stability in the real estate markets.
- Acquiring land or buying property in Dubai is much easier than it is in India. There is very little paper work involved. Regulatory barriers are lower, too. In India, investors and real estate developers have to approach several government agencies for making an investment.
- Construction norms in Dubai are builder and investor-friendly. It is not surprising that Dubai has the tallest tower in the world, Bhurj Khalifa.
- When compared to India, interest rates for investors and real estate developers are much lower. It is also easier to recover the costs by buying property in Dubai, as rental yields are higher.
- By investing over AEB 5,00,000 (Rs 90 lakh), you can be a citizen of Dubai.