DUBAI OR NOT TO BUY?
Updated: Jan 11
Under the 2020 Abraham Accords – one of the good things about 2020 – Israel and United Emirates established full diplomatic relations.
Business ties did exist previously, but everything suddenly went into overdrive.
Despite Covid, 70,000 Israelis visited Dubai in December. Kosher restaurants, tours, synagogues and even kosher wedding banquets have all sprung up, with Hebrew being openly spoken on the streets of Dubai. But it’s not just tourism: finance, agriculture. hi-tech and of course, real estate opportunities have also emerged.
We have been in touch with a number of developers throughout Dubai and Abu Dhabi. We have learned about the different projects being built on the Jumera beach, the Waterfront, the man-made islands as well as downtown Dubai and elsewhere.
We have learned about the cosmopolitan population of Dubai. Of the 3.5 million people, 80% are expats from over 200 nationalities. These nationalities are coming to Dubai because of the business and work opportunities there.
The Emiratis we have been in touch with have been totally professional, with slick presentations and a shrewd understanding of business. They are extremely impressive, as is their architecture, their taste for luxury and the speed with which they get things done. Added to that, their friendly overtures seems genuine.
Our intention is to visit the region, so that we can see the projects with our own eyes, better understand their locations, the quality of building and get a better feel for the place. But that will only happen once Covid 19 is under control.
Until then, we have found our middle men in Dubai. They work with all the contractors and know and understand the strengths of each contractor. They will be able to find the best investment for you.
The bigger question is whether you want to invest in the UAE.
There are many good reasons to invest there:
It’s very easy to do business there. The place is built for business and there is very little red tape
There are no local taxes (apart from small purchase tax) and no taxes on any profits
Management fees/service charges are very low
Buying off plan and paying cash can get you serious discounts
Returns can be high – between 5-10%
Entry level apartments are very reasonable – from around 500,000 NIS
Your money is guaranteed and placed in an Escrow account until you receive the keys
EXPO 2021 (postponed from 2020 as a result of Covid 19) is expected to bring a huge surge in property prices
The Abraham Accords has been a huge boost to the UAE economy.
The UAE currency, the Dirha, is linked to the dollar - 3.67 AED to $1 . Because of the dollar’s recent decline, properties are relatively cheaper now for Israelis. For Americans, the investment is stable.
There is a large amount of building taking place in Dubai and there is concern of oversupply. Indeed, house prices have been in decline over the last few years and the government is considering limiting the supply of new projects in order to boost prices.
There is a concern about their being too many rentals on the market.
On the other hand, this article from Bloombergs predicts that prices will rise in two years, meaning that if you buy off plan, the investment will mature once it’s complete.
This article from the respected UAE newspaper The Khalleej Times, predicts that prices will rise this year.
Investing in Dubai is very exciting, but as with all investments, you need to have as many of the facts possible and make a very level headed decision.
We’d be happy to help you consider your options.