The Strategic Advantage of Real Estate Investment
The United Arab Emirates (UAE) Golden Visa program has become a sought-after avenue for foreign investors seeking long-term residency. Investors and their families including their spouse and children can obtain a 10-year residency which is renewable as long as their investment stays in place. Among the various qualifying investment options, real estate stands out as a strategic and promising path.
Real estate investment offers a valuable opportunity for portfolio diversification. As investors seek to balance risks and returns, the real estate market in the UAE provides a tangible and enduring asset. Diversifying one’s investment portfolio through real estate aligns with sound financial principles and enhances the overall stability of an investor’s holdings.
A positive trajectory in numbers
According to data published in January 2024 from CBRE Dubai Market Report, in Dubai sales of properties worth more than AED 5m and AED 10m hit record levels in the year 2023, reaching 10,296 and 3,806, up 54.5% and 68.4% from a year earlier. Regarding the number of Golden Visas issued, Dubai alone has seen a 52% increase in the first half of 2023, compared to the same period in 2022, according to the GDRFA – Dubai.
The Housearch Investment Index has also identified the UAE as among the top five global destinations for property investment. Furthermore, according to a report by Knight Frank, Dubai now accounts for about 17% of global luxury real estate sales, up from 2% in 2019, highlighting how a new generation of ultra-high-net-worth individuals keen to invest in the emirate has emerged in this market.
Inclusion and accessibility
There are several factors driving this trend, including regulatory efforts developed to make the real estate sector even more attractive.
The UAE Golden Visa program requires a minimum investment threshold of AED 2 million or approximately USD 545,000, and real estate investments meeting the specified criteria are a direct pathway to eligibility, however, the UAE has made an effort to be more inclusive, in January 2024, the UAE has cancelled the AED 1 million minimum down payment required for people to qualify for a golden visa through real estate investment in a bid to encourage more residents and investors to establish deeper roots in the country.
Investors can qualify for the Golden Visa with properties valued at AED 2 million or more, regardless of their status—off-plan, completed, mortgaged, or not mortgaged. Investors whose properties are mortgaged through UAE banks are eligible for a Golden Visa even for example, they have only paid the first AED 100,000 instalment.
Growing prices and rental income potential
Property prices in the emirate have risen substantially in the past couple of years, driven by post-pandemic recovery and a surge in demand for residential units from residents and foreign investors. According to CBRE market report, in the 12 months leading up to August 2023, average prices rose by 19.6%, up from 18.1% a month earlier. Over this period, average apartment prices rose by 20%, and average villa prices rose by 17.3%
End-users who bought at AED 1.5- 1.8 million earlier have seen their assets’ prices surpass the AED 2 million mark making them now eligible for the UAE Golden Visa.
Beyond capital appreciation, real estate in the UAE presents rental income opportunities. Investors can benefit from the lucrative rental market by choosing properties strategically, providing an additional income stream. According to reports, investments in Dubai real estate bring high rental returns – up to 10% per year, much higher than other cities worldwide, such as New York, Hong Kong, and London.
This dual benefit of potential capital gains and rental income enhances the attractiveness of real estate as a pathway to the Golden Visa.
Stability and investment for generations
Investing in real estate within the UAE’s thriving market not only provides a secure investment platform but also aligns with the economic resilience that has characterised the nation for years. The UAE has successfully established itself as the financial hub for the Middle East and Central Asia, boasting of the best modern infrastructure, transportation, and communication services, and ranking Dubai as the most important international city and financial and commercial centre.
Furthermore, investing in real estate to achieve a Golden Visa will benefit generations to come as the program extends beyond the primary investor, allowing the inclusion of the investor’s spouse, and children no matter their age. Real estate investments meeting the stipulated criteria offer a comprehensive solution, as they qualify the investor and their family for long-term residency, providing a holistic approach to securing a stable future in the UAE.
The UAE government has demonstrated its commitment to attracting and retaining global talent, and real estate serves as a tangible commitment to the nation’s growth and development offering a strategic and rewarding choice. Beyond the financial returns, real estate aligns with the vision of a stable and prosperous future in a country renowned for its economic resilience. As investors navigate the landscape of residency options, the pathway through real estate stands out as a reliable and advantageous route to securing the coveted UAE Golden Visa.
