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Find the right approach for your UAE property investment

Dubai’s real estate market is buoyant, with record transactions in Q1 2022.

The emirate recorded an incredible 25,972 transactions between January and March - the highest number of deals since 2010 registered in a single quarter. The figure also marks the highest volume of transactions recorded since Q1 2014. Sales deals worth AED55.51 billion were logged during the period, according to Mo’asher, Dubai’s official sales and rental performance index.

March alone – the latest month for which figures are available – saw 8,399 sales transactions in Dubai, valued at AED22.58 billion - the largest volume of deals in the last seven years. Compared to March 2021, this represents an 83 per cent increase in total sales - and a 109 per cent increase in sales value. Some 60.16 per cent of total March sales were for secondary or ready properties.

Meanwhile, 8,616 off-plan properties (before the property is built and with only the plans available for inspection) were sold in Q1, worth a total of AED16.12 billion, and the secondary market transacted 11,923 properties worth Dh39.39 billion during the quarter.

The rental market remains stable, recording a 4% increase in the first quarter (compared to Q4 2021), with a total of 160,530 contracts, of which 51.89 per cent were new and 48.1 per cent renewals.

In cost terms, the overall quarterly index for sales saw a 1.251-point increase, with an index price of AED1,186,002. The apartment sales quarterly index posted a 1.26-point hike with an AED1,067,385 index price. And the villas and townhouses quarterly index registered a 1.234-point rise, with an index price of AED2,094,633.

Consider the options
As experts suggest, 2022 will see a continuing growth curve – in both property sales and prices – it’s worth taking a moment to consider the array of property purchase options open to all. And of course, increasing property sales and prices are indicative of a growing economy.

At Swiss Group, we offer advice on how to navigate property purchase in the UAE as part of our advisory services suite, which includes set-up and taxation advice. Our profound local market experience means we deliver solid, straightforward and reliable advice tailored to your specific property needs.

Firstly, it’s worth noting that a property can be purchased as an individual or as a UAE company.

Registering a property in Dubai under a company provides an additional degree of confidentiality relating to ownership and can simplify inheritance issues.

If you’re considering a real estate purchase as a business holding, creating a Special Purpose Vehicle (SPV), specifically within the Abu Dhabi Global Market (ADGM) financial free zone under a common law legal regime, can be an ideal solution.

An SPV is a passive (inactive) type of holding company, established mainly to isolate financial and/or legal risk by ring-fencing certain assets and liabilities. While there has to be proof of a connection to the UAE or GCC, this can be demonstrated by assets already owned in the region or by virtue of already having a business based here in the UAE.

Creating an ADGM SPV is straightforward, and we can guide you on this low cost, digital solution – Swiss Group is a one of the license Corporate Service Providers of ADGM.

And with individual property ownership come residency rights. In Dubai, if you make a property purchase of AED 750,000, you can apply for a three-year ‘property visa’, (where no more than 50% of the value is subject to a mortgage), or at least AED 750,000 needs to be paid to a bank.

As of September 2022, real estate investors can also now get a ten-year ‘golden visa’ if they buy a property in the UAE worth at least AED 2 million upfront or through a bank.

And what about inheritance? If you are looking to invest in UAE property as a non-Muslim, we recommend setting up a will though Dubai International Financial Centre.S

Such a will, created through the dedicated DIFC Will centre, ensures those assets are distributed in accordance with your wishes on death, avoiding the application of Shariah succession rules. Our in-house will draftsman can assist you through all the necessary steps to register such a will.

Swiss Group with our legal arm, Swiss International Consultants Ltd., offers a holistic consulting approach that will help you choose the right solution for all your property needs within the legal framework.

As Lynnette Sacchetto, a UAE real estate expert, recently told Arabian Business: “These upward trends have continued since 2021, and I expect healthy growth for both sales volumes and values this year due to the proactive and bold measures being put in place by the government. In addition, Dubai continues to thrive and has become the economic hub of the region, attracting more businesses and foreign direct investment with its encouraging and innovative environment.”

At Swiss Group, we keep a close eye on economic developments and innovation. One of Dubai’s leading luxury real estate developers, DAMAC Properties, recently announced it will accept Bitcoin and Ethereum as payment, and the city eyes metaverse-based property opportunities. We, at Swiss Group, are also preparing to offer more digital and virtual property purchase advice in the near future, as well as our renowned property investment services.

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