Despite geopolitical instability in West Asia, the Dubai real estate market is showing recovery and continues to attract investors from around the world. At the International Real Estate Exhibition organized by NKN Media in New Delhi, Ridwan Sadjan, founder and chairman of the board of directors of Danube Group, told Business Today in an exclusive interview why Dubai remains such a magnet for global investors.
Comparison with Indian Metropolises
Previously, buying an apartment in prestigious areas of Delhi-NCR or Mumbai was considered the pinnacle of life achievement for the middle and upper-middle class in India. However, the landscape of the global real estate market has undergone significant changes. Ridwan Sadjan, known as the '1% Man' and Chairman of Danube Group, emphasized that acquiring housing in a good new building in Mumbai or Gurugram today requires a very high payment, whereas Dubai has become a significantly more affordable and advantageous option.
Financial Price Comparison
When considering the international real estate market, there is often a perception of its high cost, but actual data suggests otherwise. Prices for new premium projects in areas of Mumbai, such as Bandra or Nariman Point, reach about one and a half lakh rupees per square foot. A similar situation is observed in premium projects in Gurugram on Golf Course Road or along the New Dwarka Expressway, where prices are rapidly increasing.
Ridwan Sadjan notes that in prime locations in Dubai, excellent homes can be found for a price ranging from seventy to ninety thousand rupees per square foot. Moreover, this is not just a structure, but a fully designed, furnished home into which one only needs to move personal belongings. Comparing this with London, Hong Kong, or Singapore shows that rates there are two or three times higher, making Dubai an extremely economical choice for Indians.
Innovative Payment Plans
Investors in the Indian market face serious obstacles, such as large down payments and strict mortgage conditions. However, Dubai developers have eliminated this barrier. According to Ridwan Sadjan, for an entry-level apartment costing two and a half crore rupees, only ten percent, which is two and a half million rupees, needs to be paid as a down payment. After that, according to the special '1%' payment plan, the monthly installment is only two and a half lakh rupees.
Furthermore, there is a post-handover payment plan: after paying seventy percent of the payment and receiving the keys, the remaining thirty percent can be repaid from the rental income generated by this property. This simple model has made owning international real estate highly realistic for working professionals and entrepreneurs from India.
High Rental Yield
For an investor, return on investment is critical, and in this aspect, Indian metropolises cannot compare with Dubai. In major Indian cities, the annual rental yield for commercial property barely reaches two to three percent. Conversely, Dubai maintains one of the best rental indices in the world, offering investors a return of eight to nine percent.
Although some analysts express concerns about the growing supply in Dubai, market experts dismiss these assumptions. Dubai's population is only about forty million compared to Mumbai's population of two and a half crore, and the constant influx of people from all over the world guarantees that demand will always exceed supply, supporting the stability of the rental market.
Advantages of Zero Tax and Golden Visa
Ridwan Sadjan points to two main incentives for attracting Indian investors: tax benefits and residency rules. There is no income tax in Dubai, and no capital gains tax is levied upon the sale of real estate. Investors only need to pay a four percent government fee from the land department. Additionally, when purchasing property worth two million dirhams, or approximately fifty million rupees, the investor and their entire family are granted a ten-year UAE Golden Visa. This visa not only grants the right to reside but is also considered a global status symbol, simplifying the process of obtaining American or British visas for investors.
Lifestyle and Work Model
The real estate market has transformed, offering not just walls, but a new way of life, and Dubai developers have taken this need of Indians into account. To solve the problem of growing traffic jams, projects are being launched where a luxury apartment and an office are in the same building, which is possible within fifty million rupees, falling under the Golden Visa category.
Ridwan Sadjan also reported that to attract medical professionals at the exhibition in Delhi, a special reduced rate payment plan of half a percent was presented, allowing doctors to pay only one hundred twenty thousand rupees per month instead of two hundred and fifty thousand.
Market Growth Prospects
In Ridwan's opinion, the increase in the cost of construction materials by thirty to forty percent due to global geopolitical tensions and supply chain disruptions forces developers to temporarily sell old stock at previous prices, taking losses. However, they cannot maintain this policy forever, and future projects will become significantly more expensive.
According to real estate giants, over the next three to four months, meaning by the end of the current year, Dubai real estate prices could see a surge as significant as after the pandemic. Thus, for an Indian investor wishing to diversify their portfolio globally and ensure reliable future income, Dubai currently appears to be a more suitable destination than the expensive concrete of Mumbai or Gurugram.
