Indians have increasingly invested in the United Arab Emirates (UAE) real estate market over the past few years. In fact, the Khaleej Times says Indians rank first among real estate investors in the region. Several factors have contributed to this trend.
For instance, the region offers high rental yields, the Reserve Bank of India has a favorable remittance scheme, and the real estate market is booming. So, it makes sense that so many Indians are investing in real estate in Dubai and beyond.
An Attractive Real Estate Market
According to Al Arabiya, total real estate sales transactions in July 2022 soared 61.7% from the July 2021 numbers in Dubai. This growth is being driven by a number of factors, including the region’s growing status as a regional hub and tourist destination.
Additionally, the source says UAE real estate is a good deal compared to other global cities. Real estate expert Abdullah Alajaji tells the source that home prices in Dubai are a “fraction” of the price you’d pay for a comparable property in London or New York.
High Rental Income
The UAE offers high rental yields. And Dubai, in particular, poses an opportunity to earn impressive rental income. It offers average rental yields of 7%, according to Moneycontrol. That’s significantly higher than other global cities.
For example, the source says the average rental yield is 2.8% in New York, 2.6% in London, 2.5% in Singapore, and 2.3% in Hong Kong. So, the lucrative rental market has been a big motivator for Indian investors to buy in the UAE.
The Impact of CEPA
The India-UAE Comprehensive Economic Partnership Agreement (CEPA) is a bilateral trade agreement that provides several benefits for businesses and investors in both countries. One key benefit, for example, is that it allows the free movement of goods and services between India and the UAE.
So, CEPA has helped increase trade between the two countries and made it easier for businesses to operate in both markets. Additionally, CEPA has helped to improve investment flows between India and the UAE. As a result, Sangri Today says more Indian investors are buying UAE property.
Reserve Bank of India’s Remittance Rules
Favorable remittance rules are another reason Indian investors are buying so much real estate in the UAE. Thanks to these rules, Moneycontrol says Indian investors can easily transfer money to the UAE for use in real estate investments.
The rules allow Indian investors to transfer $250,000 to the UAE every financial year. So, a couple can transfer $500,000 annually. The Reserve Bank of India set these rules as part of CEPA to strengthen ties between the two countries.
The UAE’s Golden Visa
The UAE’s Golden Visa program is another factor attracting a large number of Indian investors. According to Arabian Business, the program allows investors to obtain a visa and residency permit if they purchase property worth at least AED 2 million (US $544,500).
This is a great opportunity for Indians looking to invest in property since it offers several benefits. For example, the UAE government portal says a Golden Visa is a renewable long-term visa that allows you to live and work in the UAE for 5 to 10 years.
UAE Real Estate Can Diversify Your Portfolio
Additionally, investing in real estate is generally considered a smart way to diversify your investment portfolio. That’s because real estate is a tangible, stable, and secure investment. So, it acts as a counterbalance to investments in the stock market.
Keep Asking says diversifying your investment portfolio is important because you “spread out your risk and ensure you have the right mix of options to grow your money.” In short, adding real estate to your portfolio helps make your investments less risky.
Things To Keep in Mind
Indians are investing in real estate in the UAE for a number of reasons. For one thing, the real estate market is booming. That, of course, makes it an attractive investment. And then there’s the high rental yield potential.
Plus, the combination of favorable remittance rules and CEPA has made it easier than ever to do business between the two countries. Finally, Sangri Today says you can fly from India to Dubai in about three hours. So, it’s a convenient choice for a second home.
If you’re thinking about investing in property overseas, then you may want to consider buying property in the UAE. The region is a growing cultural hub, so this could be an opportune time to invest before home prices catch up with other global cities.