Dubai Real Estate Market Offers Multiple Opportunities

In the international real estate market, there are many exciting countries where Estonian investors are investing. According to Sanders Skorik, the head of Skover Real Estate, Dubai is one of them, where the region's rapid development has made the city an international business center.

"Dubai is the city of the future," says Sanders Skorik, who has been connected with the region since 2017. Initially as a vacation destination, later as an attractive real estate market. Dubai has developed explosively in recent years, with new neighborhoods and highways being built. The city has many advantages that are not so easily found elsewhere, such as the cleanliness of the urban environment, good climate, and safety.

More about the real estate market

Skover Estate started operating in Dubai in 2022, when much of Europe's economic life was at a standstill.

Skover is a licensed real estate company in Dubai that helps clients find the best real estate according to their wishes (winter home/rental/resale) and budget, being with the client from beginning to end, from consultation and property selection and reservation to property inspection, handover, and later rental or resale.

What kind of client should purchase real estate in Dubai? Everyone has the opportunity – only before that, you need to decide whether you want rental income, which is twice as high as in Estonia, or whether you want to grow capital by purchasing an object on paper and selling it at a higher price when it's completed. It's also not uncommon for a client to mix activities, living in Dubai themselves in winter and having the real estate rented out the rest of the time.

You can enter the Dubai real estate market today with 150,000 euros, which you don't need to spend all at once in the case of a unit under construction – you can invest according to a payment schedule until the building is completed. For this amount, you can purchase a studio apartment in a building under construction, for example, the Cove development by Imtiaz Development in the Dubailand area, which thanks to its convenient location offers quick access to the city.

The apartment price includes luxury furnishings and various amenities, such as a swimming pool and sports facilities.

The city has many developing areas and you can find suitable real estate types for every taste. From 300,000 euros, you can get a spacious two-bedroom apartment in a good area in communities. For families, for example, the Damac Lagoons residential complex is suitable, which has mainly townhouses and villas, but also apartments. The area is divided into 11 micro-neighborhoods, which are surrounded by lagoons and each neighborhood has its own theme. Naturally, the area has everything needed for living: shops, restaurants, parks, sidewalks, and sports and playgrounds. Townhouses in Damac Lagoons start from 500,000 euros. It is precisely community apartments and townhouses that are very popular on the resale market, as wealthy Europeans want to rent or buy homes there.

Waterfront property prices start at half a million euros.

Large villa prices in communities start at one and a half million euros.

What to prefer?

If the plan is to purchase real estate as an investment, the expected rental yield is twice as much as on the Estonian real estate market. In Dubai, many real estate management companies have been created that are ready to mediate rental spaces and make the investor's life comfortable – you don't have to deal with tenants on a daily basis, all tasks can be delegated to them.

There are plenty of areas in Dubai to invest in that will be attractive even in three years. The highest prices are in waterfront neighborhoods and the city center, just as in Tallinn. The farther the real estate is from the city center or the seaside, the more affordable the prices.

Depending on whether the client wants to start using the real estate immediately, it's worth looking at real estate that is about to be completed or recently completed. When buying from the resale market, you should keep in mind that 10–15 year old real estate quality is not the same as the new real estate now, as there was no unified building standard back then. Therefore, apartments in these buildings are often cheaper, but sales and rental demand is significantly lower due to higher maintenance costs and the age of the building. For comparison, current real estate developments have many extras (swimming pools, gyms, sports fields) and smart home solutions.

How to purchase real estate?

In Dubai, purchasing real estate has been made very easy, the only tax that needs to be paid is four percent of the purchase and sale amount. There is no additional land tax or income tax for individuals. It's worth knowing that since development projects are large and up to a thousand apartments can be built at once, construction timelines are also longer. Two to three years is completely normal in that region and payment also takes place during construction.

Once the buyer has signed what is known in Estonia as an obligation contract, a down payment is usually made of 10–20% of the real estate cost plus land tax to register pre-ownership to the buyer. This provides additional peace of mind and the contract is registered at the local land office. The developer cannot unilaterally change this contract later. The remaining payment is made according to the payment schedule, which depends on the location, development, price, whether 1–2% per month or 10% per year. Usually 50% is due during construction and the other 50% when keys are handed over or roughly 60/40 or 70/30 – depending on the project. Additionally, many developers offer a "post handover payment plan" option, which means that the last installment upon key handover can be deferred 2–4 years ahead, meaning paying that part interest-free directly to the developer, without bank involvement. To purchase real estate under construction, you don't need to physically go to Dubai, when purchasing ready-made real estate, you need to be present at the time of the transaction.

When purchasing ready-made real estate, a suitable property is selected, a booking agreement is made, and a booking fee is paid, which is usually about 10% of the purchase price. Within 30 days, a purchase and sale agreement must be signed and the entire remaining amount must be paid. When purchasing ready-made objects, you must also account for additional costs. These are 4% land tax from the sales amount, 2% mediation fee, and 2-3% costs related to notarial transaction. It is also possible to apply for a loan but only under certain conditions.

Every real estate object in Dubai has a buyer, because the city is large and every buyer has different wishes and budgets. Investment returns in Dubai range from 7–12 percent depending on the area, plus annual price growth of 5–15%. From autumn, there are direct flights from Tallinn to Dubai, where you can reach your destination in under 7 hours without stopovers.

For more information about Dubai real estate, contact us and we will introduce you to the local lifestyle, real estate market, and answer all your questions.

Also see https://skover.estate/

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https://www.instagram.com/skoverestate/

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