Indian investment in Dubai’s real estate sector is witnessing a paradigm shift, with youngsters emerging as the new crop of property buyers from the country in the Gulf city, industry insiders said.
Besides, the easygoing young Indian investors are also looking to invest in fancy housing properties in the mid-to-high end price range.
This is even as Indian investors pipped Russians to emerge as the largest group of overseas buyers in Dubai’s property market in the early months of 2023.
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Besides, the total Indian investments in Dubai’s real estate market this year are expected to be around $4.2 billion, a significant spike from last year.
“Traditionally, the types of Indian investors in the UAE’s real estate market are primarily businessmen, high net worth individuals and institutional investors, besides real estate developers,” Adil Akhtar, founder and CEO of Foremen Fiefdom, the Dubai-based leading real estate investment consultancy, told Arabian Business.
“However, we are [now] witnessing a paradigm shift in the investor profiles, which is the emergence of younger investors too,” Akhtar said.
Akhtar said Dubai’s cosmopolitan and multicultural environment appeals to many Indians who are looking for a city that offers a high standard of living and a diverse range of opportunities.
“Additionally, Dubai’s relatively low taxes and business-friendly policies make it an attractive destination for Indian entrepreneurs and investors”, he said.
Besides youngsters, Akhtar said more and more Indian professionals are also choosing the UAE for permanent residence and business after the new 10-year Golden Visa initiative was introduced in October 2022.
The new visa reform allows foreign nationals to obtain a 10-year UAE residency visa with manifold benefits when purchasing a property starting from AED2,000,000 ($545,000).
“The fact that Dubai provides a significant choice of luxury projects – both ready-to-move-in and off-plan – is another factor which is attracting the younger and professional Indian investors,” Akhtar said.
He said the new investor groups mostly prefer properties in the mid to high-end price range, with prices ranging between AED1.5 million to AED5 million.
Akhtar also said the prospect of Indian investments in the UAE’s real estate landscape of 2023 is promising.
“The Indian market, in particular, has shown a keen interest in the UAE’s real estate landscape. In 2023, we can expect to see a surge of Indian investments in the Gulf country’s real estate market,” he said.
Commercial and residential properties in prime locations such as Dubai Marina, Downtown Dubai, and Palm Jumeirah are expected to be the preferred areas for Indian investments this year.
“The real estate market in the UAE [this year] is expected to witness a steady growth, providing excellent opportunities for investors to reap substantial returns on their investments,” the top executive of the investment advisory said.
Indian real estate investments see 20% uptick in H1, 2022
Akhtar, citing Dubai Land Department data, said Indians have consistently been one the largest groups of property buyers in Dubai over the past decade.
“In fact, in the first half of 2022 alone, Indian nationals accounted for over 4,000 real estate transactions amounting to over AED7.2 billion ($1.96 billion) – 20 percent increase in the number of transactions and a 45 percent jump in value terms compared to the peak of Covid-19 pandemic in 2020,” he said.
With rental yields averaging around 7 percent, industry experts said investors can generate a steady stream of income from their properties in the Gulf city.
Akhtar, however, said India’s proposed hike in tax collection at source (TCS) on foreign remittances to 20 percent could certainly impact its investments in the UAE.
“The primary impact group will be businessmen and women, as well as professionals who invest in real estate as their preferred investment for asset generation,” he said.
Since the increased rates come into effect from July 1, 2023, the real impact in regard to facts and figures can only empirically be assessed during Q2 of FY 2023-2024, as India follows an April-March financial year, Akhtar said.
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