What types of real estate in Dubai you can invest in, including off-plan properties.
According to statistics, 52% of Russians want to invest in real estate because they consider it a profitable investment with minimal effort.
Most of them consider foreign real estate as a passive income.
This is due to high liquidity thanks to the currency zone, faster payback due to rental prices, and easier management by the ability to involve third-party companies to attract tenants.
All of these qualities are possessed by Dubai real estate, the prices of which continue to fall due to the large number of offers from developers.
Best houses and apartments by developer in UAE
Elie Saab Waterfront is the first luxury development by the famous fashion brand Elie Saab on Al Reem Island.
Sama Yas on Yas Island is the first luxury complex with its own green park from the well-known company, Aldar Properties.
Four Seasons Residences DIFC by H&H Development is the first residential complex by the popular luxury real estate developer in the DIFC area.
Hudayriyat Island is an exclusive project in Abu Dhabi surrounded by green parks and sandy beaches.
Altitude de GRISOGONO is an impressive project by DAMAC Properties and the fashionable jewelry house de GRISOGONO.
Mercedes-Benz Places | Binghatti is an exclusive project by Binghatti Properties that will become a new attraction center in Downtown Dubai.
It is worth noting that in 2020, the international exhibition EXPO-2020 is being held, where Dubai plans to host more than 25 million tourists during its period. Even considering the current situation regarding the coronavirus, the government of the emirate does not plan to cancel it, but according to the authorities' statements, they are doing everything possible to ensure the safety of participants and visitors. This event is directly linked to the growth of the UAE's economic indicators.
All of the following real estate can be rented out:
This is real estate at the construction stage. Many foreign investors are wary of such investments, so most offers come from companies with a global reputation - Dubai Properties, DAMAC, Emaar Properties, Select Group, and others.
In addition to the opportunity to monitor the progress of construction - all data is available on the websites of developers or Dubai real estate agencies, the developers themselves offer favorable conditions for investments. Currently, there is not a single object with 100% prepayment. Only installments with a payment plan.
Each company offers its own conditions, but the scheme is approximately as follows - 5-10% of the amount at the first payment, then 30-40% is divided into all stages of construction, and the last, largest contribution (50-60%) after commissioning. The company can take on some of the expenses, for example, paying fees, no payment for maintenance for the first 2-3 years, etc.
The proposed real estate is already leased with finishing and necessary equipment, but it can also be fully furnished. In Russia, there is no such thing as buying "naked walls" for renovation. Real estate sales from developers in Dubai is the most profitable direction in the Dubai housing market. In 2019, Emaar Properties sold off-plan property with a profit of 260% compared to 2018. And by September 2020, according to Property Finder, 48,500 units of real estate will be commissioned.
It is best to consider this moment in comparison. What can you buy in Dubai and Moscow for this money? For example, let's take the average cost of a two-bedroom apartment in Moscow as of March 2020 - 11,000,000 rubles according to RealityMag. In UAE currency, this will be 513,115 dirhams at a rate of 21.44 rubles = 1 AED.
Dubai
You can buy a studio, apartments with one or two bedrooms in areas such as Dubai Marina, International City, Dubailand, Dubai South, Emaar Beachfront, Dubai Hills. Of course, the market offers mostly studios and apartments, but the average area of such an apartment is 300 square feet or 91.2 square meters. For example, in Dubai Like Towers, you can buy an apartment with an area of 124 square meters for 475,000 dirhams, which is located in the most densely populated area of Dubai - Dubai Marina.
Or apartments with an area of 135 square meters in the center of Dubai Downtown Dubai for 485,000 dirhams in the Burj Al Nujoom complex.
If you consider more budget options, in Dubai Sports City, you can buy apartments for 260,000 dirhams with an area of 110 square meters.
The minimum rental cost in Dubai Marina is 33,000 AED/year, Downtown Dubai - 40,000 AED/year, Dubai Sports City - 19,990 AED/year. In percentage terms, the ROI for Dubai Marina - 6.9%, Downtown Dubai - 8.5%, Dubai Sports City - 7.7%. Based on this data, you can calculate the payback period of the cost of housing, which will be approximately 15 years.
Moscow
Within 11,000,000 rubles, you can buy a two-room apartment near the metro stations of Paveletskaya, Serpukhovskaya, Taganskaya, and others on the Moscow Central Circle. For such a price, there are no properties closer to the city center, and the ones offered for the specified amount are mostly from the secondary market. As for new buildings, the selection is much smaller, and they are located within the final metro stations (Nekrasovka, etc.).
The cost of renting in the Moscow Central Circle area is approximately 33,000 rubles per month, which amounts to 396,000 rubles per year. The ROI of a Moscow apartment is 3.6%, and the payback period is on average 28 years.
These figures are approximate and do not take into account taxes, utilities and service payments, furniture, and other expenses. Each country has its own expenses. For example, in Russia, you need to pay 4% of the received amount monthly, while in Dubai, there is an annual payment for apartment maintenance, which is about 2000-3000 dollars.
However, it is also worth taking into account the currency exchange rate. As the dynamics of the currency market shows, the dirham has increased in price almost 4 times over the last 13 years (in January 2007, it was worth 6.6 rubles, now it is worth 21.44 rubles). Therefore, even if the price of your property decreases by the time of sale, you will still be in profit due to this indicator.
Buying property in a currency zone is more profitable in this case, as this indicator can affect profitability several times.
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Senior Property Consultant – Metropolitan Premium Properties
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Chief Real Estate Investment Expert at Metropolitan Premium Properties
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