Is real estate investment in the UAE worthwhile?

Since the establishment of the United Arab Emirates in 1971, the country has primarily relied on its resources and natural wealth as a predictable starting point for a newly emerging nation with an economy being built from scratch.

The UAE economy then progressed rapidly, with clear growth and a strong upward trajectory, achieving advanced ranks both regionally and internationally in record time. The UAE invested its oil to advance various vital sectors in the country.

The United Arab Emirates did not settle for temporary prosperity or economic well-being based solely on the country’s natural resources such as oil and gas. The UAE developed a major national strategy to prepare for the post-oil era.

The comprehensive plan for the post-oil era in the UAE was launched at the end of 2019, focusing on projects in sustainable development sectors.

The post-oil plans in the UAE included preparing the infrastructure for real (sustainable) investment projects in various sectors such as industry, trade, technology, real estate development, tourism, media, and more.

The UAE has recently achieved significant successes in various non-oil investment sectors, such as tourism, real estate in Dubai, and finance and financial markets in Abu Dhabi.

The comprehensive renaissance witnessed by the UAE over five consecutive decades has accumulated, making the country one of the best investment destinations in the world.

Is real estate investment in the UAE worthwhile?

The real estate sector in the UAE has been one of the most important sectors included in the policy of diversifying the country’s sources of income as part of the national strategy for the post-oil era.

The real estate sector is linked to other important sectors such as tourism, entrepreneurship, trade, and industry. The UAE has witnessed a modern and advanced urban renaissance that has radically changed the country’s image over two decades.

The real estate sector in the UAE has achieved a boom and record numbers both regionally and internationally in terms of construction, modern architecture, and massive real estate projects, in line with the country’s overall goal of attracting major investors from all over the world.

Based on the concept of a sustainable economy strategy adopted by the UAE in its post-oil plans, and the current data regarding the real estate and investment market in the country—such as the high value of real estate markets and the consistently high demand—real estate investment in the UAE is considered a profitable and successful investment, yielding good returns both in the short and long term.

Advantages of real estate investment in the UAE

Foreign investors wishing to invest in the UAE real estate market enjoy several advantages, the most important of which are:

• The possibility of obtaining legal residency in the country without the need for a sponsor, which is renewed periodically (according to the type of residency) without any legal obstacles as long as the investor continues to own the property.
• Legal residency includes the spouse and children, with the possibility to sponsor a certain number of domestic workers for the family.
• The possibility of obtaining an Emirates resident ID, enabling legal investment in the country.
• The investor qualifies and is nominated to obtain the golden residency in the country, along with its additional benefits.
• Consistently high profit returns when renting or reselling the property in a continuously developing real estate market with ever-increasing demand.
• The opportunity to settle and live in the UAE within a high-quality living environment that offers luxury and comfort.

Disadvantages of real estate investment in the UAE

Despite the advantages of the UAE real estate market and the benefits it offers to investors, there are some disadvantages related to the real estate market in the country. Out of professional honesty and the responsibility that falls on Imtilak Global, it is important to inform investors of the most notable disadvantages, which are as follows:

• Generally, investing in the UAE real estate market is not suitable for those with limited budgets or income, as the real estate market in the UAE is considered high-cost.
• Freehold property purchase for foreign investors in the UAE is limited to specific areas designated by the government.
• The details of laws and regulations for foreign property ownership in the UAE differ from one emirate to another, and the laws related to foreign ownership are detailed and precise. Therefore, foreign investors should choose a real estate company with experience and a good reputation in the market to obtain a legal property that ensures their investment goals are met.

Read also: Investment value of The Springs area in Dubai.

Best cities in the UAE for real estate investment

The best UAE cities for real estate investment, ranked from best to least, are as follows:

First: Dubai

The main destination for finance and business, and the country’s primary hub for investment and investors from around the world.

The real estate market in Dubai is highly valuable and includes some of the world’s largest real estate projects.

Second: Abu Dhabi

The political capital, known for its trade activity and oil and energy companies, and also features a vibrant real estate market.

Third: Sharjah

Located next to Dubai, Sharjah’s properties are less expensive than those in Dubai, making it a preferred destination for investors whose budgets do not match Dubai’s property prices.

You may be interested: What are the best investments in Dubai.

Conditions for real estate investment in the UAE for foreigners

Laws and conditions for purchasing property in the UAE differ from one emirate to another. The conditions for foreign property ownership in the three main emirates are summarized as follows:

1 - Conditions for foreign property ownership in Abu Dhabi

Foreigners in Abu Dhabi may own residential units without owning the land, with full rights to dispose of the property by investing, renting, or reselling it.

Foreign ownership systems in Abu Dhabi take four forms:

• Ownership system

Foreigners are granted property title deeds for residential units (excluding the land) for 99 years, with full rights to dispose of and modify the property (villa or apartment) except for the land.

• Musataha system

Foreigners may invest in building on unused land under the musataha system in Abu Dhabi for a specified period of up to 50 years, renewable for a similar period if both parties agree. The foreign investor has the right to benefit from and modify the property.

• Usufruct system

Ownership of residential properties for 99 years in designated investment areas, with full right of use but no modifications allowed.

• Long-term lease system

The right to lease residential properties for an initial period of no less than 25 years.

2- Conditions for foreign property ownership in Dubai

Dubai offers more flexible and favorable conditions for foreigners wishing to own property in the UAE. The main conditions are:

• Foreign investors are allowed freehold ownership of properties in Dubai without a time limit.
• Freehold ownership is limited to freehold areas designated by the Dubai government.

3- Conditions for foreign property ownership in Sharjah

The Sharjah government allows foreigners to own property under a usufruct right not exceeding 100 years, in designated areas for foreign ownership.

The usufruct right is absolute, allowing the foreigner to rent, live in, modify, or resell the property.

Real estate investment in the UAE for foreigners and residency

According to federal laws in the UAE and the regulations of each emirate, legal residency is granted to any foreigner who invests in real estate in any form of property ownership available in the country.

Residency permits based on real estate investment are issued in several categories, each with its own specific benefits.

Real estate investment companies in the UAE

Investment in the UAE real estate market is carried out through real estate brokerage companies that operate legally and are licensed in the country.

Real estate brokerage companies in the UAE guarantee the rights of foreign investors and help prevent fraud or scams.

They also provide comprehensive services, clarifying all data and information related to real estate investment in the UAE.

This is where the role of the foreign investor comes in, carefully choosing the best real estate companies operating in the country, which offer rare and exclusive real estate investment opportunities.

Start your real estate investment in the UAE with Imtilak Global

Imtilak Global Real Estate presents itself as one of the best real estate companies operating in the UAE real estate market, offering its distinguished clients exclusive and genuine investment opportunities.

Imtilak Global also provides comprehensive services to real estate investors in the UAE, from legal consultancy services to property management and after-sales services, offering a range of services that cover everything a foreign real estate investor may need in the UAE.