Just like the population census, Dubai’s investment records read “India” on top of the list. That’s right, Indians are the biggest foreign group of investors for the Dubai real estate market. The numbers have only been going up for the last five years. In 2017 alone, Indians invested Dh15.6 billion (INR 31,200 crores) while the runner-up Saudi Arabia could only manage Dh7 billion.
So, what’s pulling Indians to Dubai? Well, Dubai is simply more value for money. Let me explain by comparing it to Mumbai, the financial capital of India.
- Affordable Luxury: Properties in Dubai are far more affordable and come with better amenities
Mumbai: Properties in major suburbs of Mumbai start at INR 30,000 (Dh1500). So, a 1,200 sq.ft. two-bedroom apartment costs around INR 36 million (Dh1.8 million) excluding INR 6 lakhs (Dh30,000) for one parking space.
Dubai: The same 1200 sq. ft. apartment with additional amenities like gym, swimming pool, two parking spaces, etc. is offered at Dh900 (INR 18,000) per sq. ft. So the apartment cost becomes Dh960,000 (INR 19.2 million).
- World-Leading Rental Yields: The very same 1200 sq. ft. apartment will earn only INR 1 million (Dh50,000) in Mumbai while the same apartment in Dubai earns Dh85,000 (INR 1.7 million). Dubai offers a world-leading 8% rental yield against Mumbai’s 3%.
- Tax-Free Regime: Purchasing a property from a developer anywhere in India attracts 12-18% taxes including Stamp Duty, Registration and GST. Dubai properties, on the other hand, only attract 4% DLD transfer charges on any property purchased. Dubai doesn’t levy any taxes on the income generated from these properties.
- Currency Rates: It’s a commonly known fact that the Indian Rupee is weakening against the Dollar since quite some time now. As a result, the Dirham which is pegged to the Dollar is also becoming stronger against the Indian Rupee. This means that any Indian investing in Dubai would currently exchange the money at INR 20 for Dh1. If the Dirham has grown stronger by the time he/she decides to sell, they may be able to get an exchange rate of INR 22 or 23 to Dh1.
In 2018, Indians purchased properties worth a whopping Dh8.6 billion by the end of September, just a few steps behind Emirati investments that stood at Dh9.4 billion. Hence, it is safe to say that even with everything that’s going on in the industry, the Indian love for Dubai real estate is unwavering.