Who is Buying Property in Dubai?

Who is buying in Dubai? Investors seeking among the highest real estate ROI in the world.

Historically, Dubai’s real estate market has experienced exponential growth, accelerating after the discovery of oil in the late 1950s which led to swift urbanisation and infrastructure development. However, it was the introduction of the foreign ownership decree over two decades ago that really captured the attention of the global investment community – hardly surprising since the value of property in Dubai has soared by over 500% during this period.

This growth reflects the emirate’s transformation into a global hub for trade, tourism, and real estate. Now in the 3rd growth cycle, the Dubai Land Department (DLD) has reported 24 months of some of the highest investment returns and spending globally: AED 528 billion in real estate transactions in 2022 and a comparable performance in the subsequent year.

Dubai's Third Growth Cycle Welcomes New International Investors

The third growth cycle introduces new nations to Dubai’s investment market. Data from 2023 highlights sustained growth alongside a potentially stabilising rate of return as new supply is introduced. This follows the historical trend observed in prime real estate markets, where periods of rapid expansion are often succeeded by more balanced phases. According to the DLD, the real estate sector remains strong, with continual significant capital inflow. It’s this stabilisation that sparks enthusiasm among long-term investors, as Dubai’s real estate market reaches a new maturity level, comparable to the enduring returns characteristic of prime real estate markets like London and New York.

Continued Expansion of Dubai’s Property Market

In 2023, Dubai’s property market recorded an impressive 18% growth in sales prices and a 26% increase in rental rates, extending the upward trend seen in previous decades.

This third growth cycle has diversified the demographic of asset owners. While Emiratis, Indians, Russians, and Britons remain significant stakeholders, investment from countries like Italy, Switzerland, and Oman has invigorated the market in the last two to three years, especially following Dubai’s robust recovery post-pandemic.

During the rest of 2024, the market is expected to maintain a healthy balance of growth and stability, evolving in response to new developments and the shifting interests of investors.

An Investment Market of Expats and States

Dubai’s real estate market stands as a testament to its appeal among a wide spectrum of investors, thanks to the city’s vibrant growth, prime location, and welcoming investment climate.

Expatriates

Expatriates, particularly from India, the UK, Europe, Russia, and the GCC, have been fundamental in Dubai’s real estate for over two decades. Their preference for luxury, including high-end apartments, penthouses, and waterfront properties, highlights Dubai’s allure for those seeking a mix of lavishness and comfort. The city’s global lifestyle and favorable tax policies make it a top choice for expats eyeing investment in second homes or valuable assets.

Ultra-high-net-worth Individuals (UHNWI) and Family Offices

UHNWIs from around the world, especially the Middle East and Asia, drive Dubai’s property demand post-pandemic. 

They typically channel their investments through private family offices, which manage substantial wealth and assets. These offices are central to purchasing and managing high-end properties, ensuring that the investments align with the families’ long-term financial goals.

Corporations

Corporate investment in Dubai’s real estate is strong, with domestic institutional investors like Emaar Properties and Damac Properties playing a critical role. These entities often acquire assets for development and kickstart new submarkets while further shaping Dubai’s skyline and contributing to its status as a global business hub.

Nation States

Sovereign wealth funds now invest directly in the emirate’s real estate sector. Capital from Abu Dhabi, Qatar, and Saudi Arabia represent the bulk of the nation-state level of investment in Dubai property. However, many other nations invest in the wider economic growth of Dubai. These funds are known for their multi-billion dollar investments, which play a significant role in the development of Dubai’s property sector. Their strategic investments are a vote of confidence in the city’s economy, and contribute to the strengthening of inter-state economic ties.

Which Countries Invest in Dubai Property?

In 2023, the DLD reported a record-breaking 1.6 million transactions spanning a spectrum of real estate activities, marking a 16.9% increase from the previous year. Marwan Bin Ghalita, the Acting Director General of DLD, emphasised the significant growth in the sector, with real estate transactions surpassing AED 634 billion and investments totalling AED 412 billion.

Here’s what the DLD figures tell new prospective investors:

Gulf Investors:

  • Number of investors: 7,449
  • Number of investments: 10,441
  • Total investment value: AED 30.75 billion 

Arab Investors:

  • Number of investors: 13,248
  • Number of investments: 17,047
  • Total investment value: Over AED 29.23 billion

Foreign Investors:

  • Number of investors: 90,753
  • Number of investments: 122,937
  • Total investment value: AED 276.28 billion

Which Foreign Nationalities Drive Dubai's Impressive Property Investment?

  • Indian investors lead with over 2,000 transactions worth AED 36.6 billion, primarily in areas like Dubai Marina and Downtown Dubai.
  • Chinese investors made close to 1,500 transactions valued at AED 24.7 billion, showing interest in developments like Dubai Creek Harbour.
  • British investors made over 1300 transactions totalling AED 22.4 billion, with significant transactions in Dubai Marina and Palm Jumeirah.
  • Russian nationals invested through almost 1000 transactions worth AED 14.2 billion, favouring prime locations such as Downtown Dubai, Palm Jumeirah, and Business Bay.

However, in recent years, record numbers of investors from Italy, Germany, Kuwait, Romania, and several other countries have made significant forays into the Dubai market.

What Draws International Investors to Dubai's Real Estate Market?

Dubai’s real estate market has long been a magnet for overseas investors, and several factors contribute to this draw. A key attraction is the strong ROI that Dubai properties offer. The city’s strategic location as a global business hub, coupled with its advanced infrastructure, ensures that real estate assets appreciate, offering lucrative returns to investors.

The lifestyle in Dubai is another significant draw. Known for its luxury living, world-class amenities, and cultural diversity, Dubai offers a quality of life that is hard to match. From the sun-soaked beaches to the bustling souks, the city caters to a wide range of preferences and lifestyles, making it an ideal location for those looking to invest in a second home or a vacation property.

Moreover, the Dubai government has implemented investor-friendly policies, such as the Golden Visa system, which grants long-term residency to property investors. This initiative has been highly successful, with a substantial number of Golden Visas issued to real estate investors, providing them with stability and a sense of security. 

In 2023, Dubai experienced a significant increase in the issuance of Golden Visas. By November, the General Directorate of Residency and Foreigners Affairs reported that over 150,000 Golden Visas had been issued within the emirate.

Popular Areas For Investment in Dubai

The Dubai Land Department reported the top 10 areas for investment in Dubai property in the first 2023 as:

  • Al Barsha South Fourth: With a remarkable 7,228 transactions, this sub-market had a breakout six months with investors from all nations.
  • Dubai Marina: A perennial investment favourite, it saw 6,618 transactions.
  • Business Bay: This commercial hub registered 4,792 transactions.
  • Wadi Al-Safa 3: Registered a significant 4,140 transactions.
  • Burj Khalifa and surrounding DownTown: The iconic landmark’s vicinity recorded 3,526 transactions.
  • Al Thanyah Fifth: This area saw 3,417 transactions.
  • Al Khairan First: With 3,333 transactions, it’s a growing investment spot.
  • Hadaeq Mohammed bin Rashid: This area had 3,207 transactions.
  • El Merkadh: It witnessed 3,091 transactions.
  • Al Hebiah Fifth: Completing the top ten with 2,288 transactions.

Dubai Property Market: A Healthy Mix of Legacy and Newcomer Investors

Dubai’s real estate market is currently being embraced by a healthy mix of both seasoned and emerging investors, reflecting a perfect balance between domestic dynamism and international allure. Traditional stakeholders, including Emiratis and long-standing international investors from India, the UK, Europe, Russia, and the GCC, continue to invest deeply, reinforcing the market’s strength.

Excitingly, new waves of capital from Italy, Switzerland, Oman, and beyond are infusing fresh perspectives and opportunities, signaling a broadening interest in Dubai’s thriving property scene. This growing diversity, coupled with a surge in investment from sovereign wealth funds and corporate entities, paints a picture of a market that is mature and still expanding.

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