International Investment

INVESTING IN DUBAI
FROM IRELAND

DUBAI: UNLOCKING OPPORTUNITIES FOR IRISH INVESTORS

Dubai has become a booming metropolis in the last decade. Progressive government initiatives, favourable property laws, strong infrastructure investments, and numerous economic diversification policies have turned Dubai real estate into a top draw for international investors, including those from Ireland.

While Ireland’s housing supply shortage and exorbitant property prices continue to deter local investors, Dubai property presents a lucrative alternative. With a dynamic real estate market driven by high-net-worth individuals and new mega projects (10,000 new units added in Q1 2024 alone) underway, investor confidence couldn’t be stronger. 

A LEADING PROPERTY MARKET FOR IRISH INVESTMENT

Following the economic impacts of the COVID-19 pandemic, Brexit uncertainties, and Ukraine’s current conflict, Ireland’s economy is slowly rebounding in 2024. However, its property market still faces challenges with a stagnant construction sector causing high housing demand and a limited property supply. In 2023, nationwide housing prices increased by only 3.4%, the smallest rise since 2019.

While Irish investors struggle in the local market, Dubai continues to match consumer growing demand.  With off-plan properties, renovated villas and apartments in prime locations, and luxurious high-rise developments such as Palm Jumeirah Island, there’s something for investors of all budgets.

In April 2024 alone, Dubai property prices rose by 1.95%, reaching an all-time high and marking the 38th consecutive month of growth. Sales transaction volumes also increased by 44.3% year-on-year, and sales of homes worth $10 million or more rose by 6% in the first quarter, totaling $1.73 billion.

Overall, Dubai has made a colossal rebound, with property prices up 72.1% from the market low of April 2009 and 9.5% above the market peak of September 2014.

In contrast, Ireland’s residential real estate market transactions are expected to grow to US$14.14 billion by 2024, with a steady annual growth rate (CAGR) of 4.88% from 2024 to 2028, projecting a market volume of US$17.11 billion by 2028. However, Dubai’s real estate market is outpacing Ireland’s growth, with property prices forecasted to surge between 8% and 12% this year. This surge, coupled with high-value transactions, highlights the resilience of Dubai’s real estate sector.

WHAT ELSE DO IRISH INVESTORS NEED TO KNOW?

The Celtic Tiger years, from the mid-1990s to mid-2000s, were a golden age for Irish investors. With solid budget policies, a stable national economy, and significant government infrastructure investment, property prices followed suit and rose exponentially.

Dubai, like Ireland in the early 2000s, is experiencing its own golden age. However, to prevent another property bubble and subsequent crash, the UAE government has implemented stricter regulations and measures to maintain steady growth and avoid speculative investing. These include prudent mortgage regulations, monitoring supply and demand, and continued investment in infrastructure projects.

Additionally, with a maturing economy, tax-free environment, and increasing initiatives to attract foreign investors, Dubai’s real estate market success is set to continue.

Here’s what Irish investors need to know about investing in Dubai:

  • Investors can expect a property ROI between 5.6% and 9.2%, with Downtown Dubai, Palm Jumeirah, and Dubai Marina being top-performing areas.
  • Dubai is seen as the most transparent market in the MENA region, thanks to regulatory measures, like the Real Estate Regulatory Agency (RERA) and transparent legal frameworks.
  • Attracts highly skilled workers across various industries in the UAE, creating a sophisticated and cosmopolitan society.
  • The currency is pegged to the US dollar and provides stability and favourable exchange rates to foreign investors.
  • Dubai’s GDP is forecasted to grow by approximately 4.2%, with an inflation rate of around 2-3%. Its population is also projected to reach about 3.6 million​ in 2024.
  • Attracts the most international tourists in the UAE, making it a desirable location for short-term rental investments.
  • Currently, 10,000 Irish people live in the UAE, a number expected to increase as its neighbour, the UK remains the top source of foreign property investors in Dubai.
  • Irish investors can secure the Golden Visa, a 10-year residency, for property purchases of at least €544,500 (AED 2 million).
  • Dubai properties are significantly cheaper than Dublin’s and are similarly priced to properties in Cork and Galway city centres. Meanwhile, prices in Dubai are growing exponentially, giving investors more potential for high capital gains.

Dubai’s openness to change and innovation has attracted Irish businesses in large numbers. Irish companies have invested significantly in various sectors, including aviation, construction, finance, and technology, leveraging Dubai’s strategic advantages and business-friendly environment. Currently, around 250 Irish companies operate in the UAE aviation and aerospace sector, contributing €1.8 billion to the Irish economy. 

ECONOMIC AND INVESTMENT TIES BETWEEN DUBAI AND IRELAND

When two regions open their economies to each other, trade and investment opportunities increase. This is undoubtedly true with Dubai and Ireland. Trade between the two areas, particularly Irish exports to the UAE, has steadily increased. Enterprise Ireland, an Irish government agency, has also supported Irish businesses expanding into the UAE and other Middle Eastern markets.

In January 2024, the Dubai Chamber of Digital Economy and Enterprise Ireland signed a memorandum to promote bilateral trade and investment opportunities, particularly in technology and sustainable practices. This agreement coupled with UAE’s 10,000-strong Irish community, helps to shape economic and investment relations with Dubai. 

DUBAI PROPERTIES THAT ATTRACT THE MOST INTEREST

Dubai’s property market isn’t just about skyscrapers and luxury villas. The Emirate has many property types that stand out in different ways. 

Irish investors can look forward to the following property types to invest in:

  • Renovated Villas and Houses: Demand for renovated villas and houses, instead of just new builds, continue to gain solid traction. 
  • Mid-Priced Apartments: AED 1-3 million properties dominate the Dubai market. This particularly appeals to Irish investors looking for mid-priced options with good rental yields.
  • High-End Apartments: High-end apartments in locations like Address Residences Zabeel and Sobha One have seen significant interest. These properties are popular due to their luxury finishes and prime locations. 

With a balanced market, investor interest in off-plan and built properties remains stable. Dubai’s diverse options provide investors with a flexible and dynamic property market.

VISA OPPORTUNITIES FOR IRISH INVESTORS

Dubai’s Golden Visa is a long-term residency program for investors, entrepreneurs, and talented professionals contributing to the UAE’s growth.

So, how does it work for Irish investors?

Buyers are granted a ten-year visa for purchasing one or more off-plan properties costing at least USD 544,500 (AED 2 million). Similarly, buying property worth AED 750,000 entitles you to a three-year renewable visa, provided the property is fully paid and not under mortgage. For a five-year visa, you must invest in property worth AED 5 million, which must be fully owned and held for at least three years.

These visas offer the flexibility to live, access services, and conduct business without sponsorship or other restraints.

FAVOURABLE TAX REGULATIONS FOR PROPERTY INVESTMENT

Irish investors can find reassurance in Dubai’s tax policies, making it an enticing destination for their real estate ventures. The emirate has no capital gains, corporate, or property taxes, allowing for tax-free rental income and capital gains. Compared to Ireland’s tax rate of 12.5% for most businesses and the new global minimum tax rate of 15% for large multinational companies, Dubai is a more tax-efficient option.

The UAE’s double taxation avoidance agreements with many countries ensure that income isn’t taxed twice. This means investors and businesses can avoid being taxed in both Ireland and the UAE, further increasing their profits. These agreements and Dubai’s mature legal and regulatory system create a stable investment environment for property investors.

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