The Dubai real estate market has long been an attractive destination for investors from all over the world, including those from abroad. Thanks to high profits, tax incentives and a rapidly developing economy. Among the various investment options, buying plots of land in Dubai has gained great demand due to the long-term growth potential, profitability and flexibility in investing.
What is a «plot»?
A plot is an undeveloped land plot for a variety of purposes that can be used to build commercial buildings for personal or investment purposes. By the way, a plot is a commercial property. Investors can buy these plots for: commercial projects (offices, retail space), residential development (villas, townhouses), resale in anticipation of an increase in value.
About money
Last year, Dubai saw a record number of plot transactions — more than 180,000 for a total of over AED 500 billion. Investors earned almost AED 60 billion on resales, while the secondary market brought in almost AED 60 billion, up 34% from the previous year and 1,300% more than in the last 5 years.
The rapid growth in plot prices demonstrates investor confidence in the future of Dubai. This was made possible largely by strict regulations, digital transparency tools and long-term development strategies implemented by the Land Department and the Government of Dubai.
Betterhomes previously reported a noticeable increase in interest from foreign investors in purchasing land plots. They are primarily attracted by the Emirates Hills, Dubai Hills and Palm Jumeirah areas. In these areas, land plots cost an average of AED 50 million.
Also in demand are areas with a more affordable entry threshold. Dubai South — located near Al Maktoum International Airport and Expo City. Ideal for commercial and residential investments due to prices and future growth prospects.
Another area is Dubailand. Actively developing, with available plots suitable for townhouses and villas. Worth considering for those looking for long-term growth potential as infrastructure develops.
Jumeirah Village Circle (JVC) — a popular choice for investors with an average budget. There are affordable plots of land for development. And there is also high demand for rent due to the central location.
— The average income and return on investment from plots in Dubai is higher than in the residential real estate segment (apartments and villas) — 7-10% versus 15-25%. But this is not the limit. We see that transactions with a yield of X2 are being made on the market, — says Olga Poletskaya, CEO of Colife Invest.
A well-known case is the sale of a plot of land on an artificial sand island in the shape of a seahorse, the owner of which sold it and received a 242% profit, or $ 23 million. He owned the plot for 2 years, having bought it for $ 9.9 million.
Why plots?
Investing in residential real estate in Dubai is well known and understood by foreign investors. However, the growing popularity of purchasing plots has its own reasons. What are they?
Plot prices are growing faster than finished real estate in developing areas.
Flexibility in choice. You can build an individual villa, a commercial building, or do nothing and simply resell it for a higher price.
Often a lower entry cost than buying a finished property.
Tax incentives – the absence of property tax or capital gains tax makes investments more profitable.
Passive income potential. You can lease plot to businesses (for example, for parking, warehouses).
Strong growth potential until 2030. Upcoming projects such as Expo City, Al Maktoum Airport, Dubai Urban Plan 2040 will drive demand.