Real estate is one of the most stable and reliable types of investments, which attracts the attention of many people. However, if you regularly google dubai villa price, you may have noticed the drastic increase of value. In recent years, real estate prices have increased significantly in Dubai, and many inexperienced investors are wondering why this is happening. In this article, we will look at 7 reasons why real estate is increasing in price.
1. Location of the city
One of the main reasons for the rise in property values in Dubai is its geographical location. Dubai is located in the territory of the Emirates, which is a beautiful corner of the Arabian Peninsula. The city is not only close to a seaport, but also has an airport, which is connected to the world routes. This enables lightning-fast international connections with the most developed countries in the world. Consequently, Dubai is experiencing a growing flow of foreign investors and tourists.
2. Population growth
One of the main reasons why real estate prices are increasing is due to population growth. Every year there are more and more people relocating to Dubai due to several reasons and they need somewhere to live. This leads to an increase in demand for housing, which in turn increases real estate prices.
Population growth in Dubai affects real estate prices as demand for housing increases and supply remains stable or insufficient to meet demand. Factors that can lead to an increase in population include economic growth, the development of tourism and the arrival of the labour force.
3. Low interest rates
Another reason why real estate prices are increasing is the low level of interest rates. When interest rates are low, people can afford to take out more credit to buy a home. This increases the demand for real estate and, therefore, raises the price of real estate.
For foreign investors planning to buy property in Dubai, the tax benefits are an important reason why it makes sense to buy here. There is no government tax on income or interest, which is attracting an increasing number of foreign buyers.
4. The uniqueness of construction
Dubai is a dream city that is known around the world for its architecture and multi-billion dollar projects. Residential complexes, hotels, and multi-billion dollar projects such as the Burj Khalifa, Dubailand, and The World Island attract a huge number of tourists and investors. All this leads to an increase in the cost of housing in Dubai, due to the fact that the city is closely connected with these unique infrastructure facilities.
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5. Sustainability of the economy
A resilient economy is also the most important reason for the rising cost of housing in Dubai. The global economic crises have no effect on this city, as its economy is based on oil profits, tourism and investment shares.
Some other factors that make Dubai`s economy stable and robust:
- Diversity of economic sectors. Dubai is developing several sectors simultaneously, including trade, finance, tourism, real estate and infrastructure. This makes the economy more resilient to changes in one sector.
- Investment in infrastructure. Dubai invests heavily in infrastructure development, including transportation, housing and education. This attracts large numbers of businesses and tourists, which boosts the economy.
- Strong government support. The government of Dubai actively supports businesses and investors. It offers various incentives and tax advantages, which attracts foreign investors and contributes to the sustainability of the economy.
- The presence of many international companies and brands. Dubai attracts many international companies and brands which help accelerate economic growth. In addition, such companies are not dependent on one country or region, which also makes the economy more stable.
- Conservative fiscal policy. Dubai monitors its financial budget and does not allow his depletion of resources, this allows for stability in the economy. In addition, Dubai diversifies industries, which helps avoid crises and negative effects in one direction.
6. Attractive job opportunities
Dubai is one of the most popular places for foreign workers due to its rapidly growing economy and high level of business development. Many foreign professionals work in Dubai, making up about 85% of the city’s population. All of them need accommodation. Most prefer to buy homes and make Dubai a permanent place for living.
Career opportunities in Dubai for foreigners are huge and include industries such as finance, healthcare, tourism, consulting, construction, IT, manufacturing, retail and more.
Some of the benefits of working in Dubai for foreigners include high salaries, tax-free income, and health insurance, as well as the opportunity to work with international companies and improve language skills.
7. General inflation
Rising prices for building materials directly affect the price of housing, since building materials are a major component of any construction project. If the price of building materials goes up, the cost of construction and, consequently, real estate prices go up as well. Construction companies are forced to raise home prices to cover the cost of purchasing materials as well as equipment and labour.
Many factors, such as the size and type of the residential complex, the chosen building materials and suppliers, as well as the current prices of building materials in Dubai influence the total value of a property. It can be assumed that the cost of building materials will be significant, especially if we are talking about a high-end residential complex using innovative technologies and materials.
The bottom line
In conclusion, there are multiple factors that force real estate prices to go up. Having an intention of buying real estate only for investment purposes, it is recommended to pay attention more to the prospects of improvement and profit rather than its style and interior. Even the most appealing dwellings can offer nothing more than just a luxury layout. If you are planning to invest in real estate, consider the above-mentioned factors when choosing a property.
