Investors from Australia, the UK, Europe, North America, Turkey and Iran will lead the Dubai property market’s next growth cycle, attracted by higher returns than any major markets, a tax-free environment, rising taxes in those markets and a challenging environment in those countries.
Industry insiders say that in addition to these nationalities, investors from other traditional markets such as India, Pakistan and the Middle East will also continue to be major contributors to the fourth growth cycle of Dubai’s highly promising real estate market.
The emirate’s real estate market has seen three cycles – the pre-global financial crisis of 2009, 2014 and post-Covid. Many industry executives believe the third cycle is nearing its end after reaching a peak in 2023-24. Hence, the fourth cycle will begin soon after as the inflow of foreign funds will further increase in the next cycle.
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However, the fourth cycle will not be a boom-bust cycle but rather a slight correction before the next growth takes off.
Guillaume Giroux, CEO of Elysee Vendome Real Estate, said Dubai is about to finish its third property cycle, with a new one coming up soon and the next cycle is expected to attract buyers from different countries.
“French investors are still interested in Dubai’s properties, especially with uncertainties in Europe pushing them to look elsewhere. It’s predicted that many European nationalities will influence Dubai’s property market in the future.”
He added that high taxes and lower returns in their home countries are driving investors to seek better opportunities abroad. “Challenges like strict regulations in France are also pushing investors towards markets with higher returns and stable rules.”
Mouna Muller, client manager at Betterhomes, said as Dubai’s third property cycle draws to a close, the fourth cycle is anticipated to be fuelled by a diverse range of investors.
He added that the prospect of higher taxes in the UK, Australia, and Europe is expected to encourage investors from these regions to consider Dubai, given its tax-free environment and favourable investment climate.
“Europeans find Dubai appealing because of its attractive lifestyle, business opportunities, and favourable residency programmes. Iranians are seeking economic and political stability, along with cultural ties and proximity to Dubai. Turkish investors are attracted by the need for economic diversification, business opportunities, and the high demand for high-quality real estate in Dubai,” he said.
Muller said investors from India, China, Iran, Turkey, and other countries will also play pivotal roles, influenced by diverse economic and geopolitical factors.
Ramjee Iyer, chairman and managing director of Acube Developments, said investors from countries with comparatively high taxes such as the UK, Australia, and most of Europe, understandably look for tax-efficient investment opportunities abroad, and Dubai’s tax-free environment is hugely appealing.
Chinese replacing Russian investors?
Industry players suggest that the influx of Russian investors has slowed down and they will be replaced by Chinese investors, who will be a major player in the local property market.
Ramjee Iyer said the recent data has shown that British investors have overtaken Indians this year as they flock to the UAE for Golden Visas, tax-free benefits, high rental yields, and the emirate’s famous luxury lifestyle.
“The Chinese will also be a major Dubai market force due to the two nations’ robust economic connections and strengthened political ties. Other nationalities worth keeping an eye on include Turkey and Iran. Turkish buyers appreciate Dubai’s strong economy and innovative projects, while Iranian buyers find Dubai’s peaceful atmosphere, career opportunities, and economic stability highly appealing.”
Buying to live
Paul Christodoulou, CEO of Aqua Properties, also anticipated a stronger interest from European investors, with Germans gaining traction.
“The British presence has always been substantial, and currently, we are witnessing an even greater influx of British investors. In addition, investors from Australia, Singapore, and North Americans from the US and Canada are emerging as key players in Dubai’s property market, significantly attracted by Dubai’s zero per cent tax on investments and income tax.”
He added that European, British and Australian investors are also drawn due to long-term residency and a very attractive return on investment (RoI).
According to Christodoulou, those investors who are increasingly keen to relocate with their families through the Golden Visa and expand their Dubai property portfolios are also buying properties in Dubai.
“Having said this, many of these buyers are approaching investments intending to secure a profitable asset initially, with plans to potentially transition to living in Dubai within the next few years. These investors are effectively end-users who initially purchase with a short-term investor mindset but with a long-term living perspective in mind.”
He stressed that Dubai is evolving into more of an end-user market, with residents increasingly investing. “Recent transactions show close to 60 per cent of sales in 2024 were off-plan, indicating strong investor interest in investment. However, it’s true that a lot of foreign investors are residing in Dubai predominantly and are UAE residents.”
Foreign investors to continue dominating
International buyers are the backbone of Dubai’s property market, drawn by its strategic location, tax-free status, and inviting investment climate.
“This trend is expected to stay strong, as Dubai remains a magnet for foreign investors. However, there’s a growing interest among UAE residents in property investment, which could gradually help in stabilising the market over time,” Muller said.
Ramjee Iyer stated that foreign investors – including both expat residents and non-resident buyers – significantly influence Dubai’s property market. “Their interest in Dubai comes from factors like security, high rental yields, tax incentives, and lifestyle opportunities and I don’t see this trend changing any time soon, if anything it will get stronger.”
Guillaume Giroux of Elysee Vendome Real Estate, said the majority of investors are from outside the UAE, mainly from Europe.