Oil and geopolitics have always dominated Middle Eastern economic cycles. In 2017, the United Arab Emirates reported the lowest economic growth rate since the 2009 crisis. Given a partial recovery in oil prices and diversification of the economy, GDP growth slowed to 1.7% in 2017 and has since gained momentum in 2018. We can identify five factors that influence the Middle East Economics. 

1. Gross Domestic Product

Growth in the region is expected to accelerate from 2.8% in 2017 to 3.1% in 2018. In addition, higher oil prices should provide the fiscal space that allows governments to increase spending and support growth.

Dubai’s economy is among the most diversified in the region, thanks to factors such as a highly attractive business environment that has brought in large amounts of foreign investment. Despite producing little oil, growth has been affected in recent years by the knock-on effects of the fall in international oil prices and a consequent slowdown in neighbouring hydrocarbon-dependent territories. However, this has benefited other sectors, such as transport, tourism and other indirectly related activities. 

Oil production, which once accounted for 50 percent of Dubai’s gross domestic product, contributes much less today.

2. Population Growth

The most populous of the seven United Arab Emirates and home to more than 200 nationalities, Dubai is growing faster than its neighbours as the No. 3 regional tourist destination behind Turkey and Saudi Arabia. At the end of 2017, Dubai can count more than 2.4 million residents and nowadays, according to the Dubai Statistic Center the current resident population of Dubai is 3.1 Million (updated June 2018).

Situated within eight flying hours of two-thirds of the world’s population, Dubai has the region’s busiest international airport measured in total passengers and fourth-largest airline based on revenue per passenger kilometre.

3. Strategic Location

The UAE enjoys a strategic location between Asia, Europe and Africa. Thousands of Chinese businesses use Dubai as a hub for trading in Africa. Indian traders use the emirate to access the world. Latin Americans see the country as a launching platform into South Asia. Western nationals use Dubai as a hub for the Middle East.

4. Fluid Prices

The flexible prices and many typologies of houses/apartments in Dubai may allow capital appreciation. Most areas are still developing, but each one is characterised to be already mature and stable. 

All of Dubai's areas have fluctuating prices during the year. For the past couple of years, the differential ratio seems more stable, with a fluctuation between -2% and +2% monthly, an improvement compares to the previous years.

5. Consistent Governme

Government spending on infrastructure continues to receive a major injection of capital. Abu Dhabi continues to develop the infrastructure required for one of the wealthiest cities in the world. Dubai is continuing to keep its prestigious name as the city with the most records in the world; in the coming two years, the government is preparing for one of its biggest events:

Expo 2020

 

Dubai is implementing new projects for hosting World Expo in 2020; AED 30 billion will be spent on infrastructure at the Expo site and throughout the city.

The UAE plans to spend AED 6 billion on major infrastructure developments across the country, including road networks and federal buildings. Khalifa Initiative in the northern emirates is designed to ensure that, residents of these emirates enjoy the same facilities as those living in the larger emirates of Abu Dhabi and Dubai. The UAE is also working on the Etihad Rail project, which will offer a significant leap in land transport by year 2021.

Let's explore some of Dubai's most significant future developments:

Ain Dubai, Bluewater's Island, Dubai Marina

Bluewater's Island, a Meraas development, is set to become the main attraction of Dubai Marina, which will also feature entertainment, retail, residential and hospitality offerings. The creation of world-class entertainment destinations marks a core component of Meraas’ strategy. In line with Dubai’s tourism vision for 2020.

Dubai Creek Harbor, Ras Al Khor

Swooping down along palm tree-lined boardwalks with waterfront living amid Dubai's future tallest tower, a new video released by developer Emaar showcases one the city's most exciting projects, expectation 2025.

Museum of Future, Downtown 

 

Unique incubator for futuristic innovation and design, currently under construction in Dubai, UAE. Opening in 2019.

Aladdin City, Dubai Creek 

Aladdin City is one of those projects that’ll have the remarkable capacity to stand out in a city where there is already a flurry of extremely diverse and ground-breaking buildings. Said to be inspired by the 11th-century fables of Aladdin and Sinbad the Sailor.

Al Wasl Plaza, Expo 2020 Area

 

The project's scope of work consists of a central hub linking all three thematic pavilions located at the center of the Expo 2020 site, Dubai.

Uptown, Jumeirah Lake Towers

Operated by Dubai Multi Commodities Centre (DMCC), the project is located within walking distance of JLT and will feature more than 200 retail outlets and restaurants, as well as 3,000 residences.

Route 2020 Metro, Infrastructure

The 15 km branch will start at Nakheel Harbour & Tower on the existing Red Line, then run on 11·8 km of viaduct with stations serving The Gardens, Discovery Gardens and Al Furjan. The stations at Jumeirah Golf Estates and Dubai Investment Park would be on a 3.2 km underground section, before the terminus at Expo 2020 site.

 

High Yield Advisors elevates its organization and business processes to ISO International Standards.

High Yield Advisors (HYA) a Dubai based asset investment organization offering its clients a unique real estate investment business model, has completed the demanding internal process of operational and organizational restructuring to achieve ISO:9001:2015 certification for its quality management system.

The ISO certification, received from the International Accreditation Service in alliance with BQC certifications, is in credit of HYA’s quality management and their ability to consistently provide services that meet and aim to enhance customer satisfaction in real estate investment processes, research, risk profiling, asset management, and financial reporting.

Giovanni Caradonna, Partner, HYA, said: “The ISO 9001:2015 certification is a true testament of the company’s values and reinforces our operational and organizational processes and procedures which are now aligned with the most professional international standards, with a strong focus to build a proper company quality management culture.”

Patrick, HYA Founding Partner, added: “From the beginning, HYA has been at the forefront in terms of quality of service. Our company policy has always been to grow our clients’ confidence and belief by offering complete transparency. The ISO 9001:2015 demonstrates our dedication to offering the most professional investment process on the market today.”

Developed as an evolution of an established property management and real estate brokerage company, HYA possesses a collective 20 years of UAE experience, offering a genuine market understanding and a consistent capability to select the finest investment opportunities, whilst applying an advanced mathematical model to its portfolio selection.

The investment process covers the complete investment cycle from client profiling, to the study, selection, acquisition and the total management of an investment portfolio.

Dubai places third in Expedia’s top EMEA destinations, exceeding Rome and Istanbul

Dubai has been positioned third of most popular destinations for travel in the Europe, Middle East and Africa region during the first quarter of 2018, as indicated by travel website site Expedia.

London was rated as the best city on list, trailed by Paris and Dubai. The UAE city beat the likes of Rome, Amsterdam, Barcelona and Istanbul to take the third spot.

As indicated by the data from Expedia, worldwide demand for travel into Dubai continued to be strong during the first quarter.

American travellers topped the list for inbound travel, up nearly 90 compared to the same period last year, trailed by travellers from the UK, who demonstrated a year on year rise of nearly 45 percent.  

The data also indicated that package demand was increasingly popular for travel to the emirate, with inbound travel showing a growth of almost 40 per cent compared to last year.

Dubai got 2 percent more tourists in the first quarter of the year than in the same period in 2017, as indicated by the emirate's tourism office.

Overnight visitors expanded to 4.7 million in the initial three months of the year, led by a 7 percent increase in travellers from Dubai's greatest market India (617,000) and a 106 percent rise in Russian travellers to 259,000.

The Expedia report credited Dubai's high ranking to its status as one of the world's best shopping destinations. The emirate has in excess of 60 malls and major worldwide brands, and the second-highest density of shopping centres on the planet.

It also boasts a thriving activity and entertainment sector with options ranging from skiing to touring the desert.

Paula de Keijzer, senior chief at Expedia Group stated: “Dubai’s location is just one of the many factors that make it a global hub for travel and tourism. We have seen a steady growth in the number of international visitors to the region and this number is likely to keep increasing as the economy grows, especially with the availability of flights and hotels, and the increase in number of tourist attractions in Dubai.

“For hoteliers, this presents an opportunity to capitalise on this increased demand for travel into the emirate by looking into the travellers origin of country and catering specifically to their needs. For example, tailoring experiences based on language, or offering unique experiences that they might not get anywhere else.”

Hotel supply in Dubai stood at 108,807 rooms throughout 689 properties before the end of the first quarter, rising 4 percent and 1 percent respectively, as per Dubai Tourism.

Occupied room nights during Q1 equalled 8.27 million compared with 7.96 million the previous year and occupancy totalled 87 percent.

Dubai is planning to draw in 20 million tourists every year by 2020 from 15.79 million a year ago.

To help tourism, Dubai has declared plans to present a fixed-price tourist pass for attractions like the world's tallest building the Burj Khalifa and theme parks.

What makes Dubai a 5-star real estate investment destination

Why do people invest in Dubai? High Yield Advisors explores the different reasons to why people invest, from a family home, holiday home, or to build a successful investment portfolio.

  1. Family Home

Many factors support buying a family home for families throughout the city. Dubai has been developed to be a friendly and accessible environment. Every community in Dubai is well designed and offers outstanding facilities to support growing multi-cultural families. 

  1. Cleanliness, high standard of cleanliness and Dubai knows how to keep its streets and communities clean all the time.
  2. Basic Infrastructure. network of medical centers, public and private hospitals, you will get the best healthcare service. Dubai has got the best schools, colleges and major international universities have established their campuses.
  3. Security. Dubai police is famous for its law and order maintaining skills. Due to strict regulations, Dubai is also very safe from outside threats as well.
  1. Holiday Home

One of the fastest growing sectors for Dubai is tourism, attractive places and many world record attractions capture the interest of people to visit the city.   

  1. Buy Property in Dubai and Get an Investor Residence Visa. The property value should be equal or above Dh1 million to qualify for UAE resident visa.
  2. No Tax on Your Dubai Property. Buying a real estate means that you must pay government taxes on that property. The benefit of buying property in Dubai is that, you don’t have to pay any tax on that property.
  3. Great Weather and year-round activities. The sunny beaches of Dubai that are usually at a walking distance from your property are a great source of leisure for people who want to buy their holiday home in Dubai.
  1. Investment Portfolio

The biggest driving force behind real estate purchase is the investment opportunity. It is the best way to consolidate your funds and let them grow while enjoying the benefits of yearly rental income should you choose to purchase a property as an investment.

  1. Buying Property in Dubai Costs Less. According the research of global property guide[i], comparing to other real estate capitals around the world, Dubai places its self in a good position when comparing the price per sq. meter.

Country/City

Buying Price

US $ per Sq. Ft.

Buying Price

US $ per Sq. Mt.

UK, London

1,875.71

20,190

US, New York

1,597.1

17,191

Japan, Tokyo

1,516.37

16,322

France, Paris

1,098.95

12,748

China, Shanghai

1,098.95

11,829

Australia, Sidney

995.09

10,711

Canada, Toronto

990,07

10,657

Italy, Rome

784.01

8,439

Netherlands, Amsterdam

641.22

6,902

UAE, Dubai

549.80

5,918

Cayman, Grand Cayman

386.76

4,163

Bahamas

337.42

3,632

Egypt, Cairo

77..20

831

Can you see the difference? Average property price in Dubai is merely USD 549 per square feet which is at least 6 times less than the most expensive city in the list, London.

  1. Zero Property Tax in Dubai. Dubai is famous worldwide among real estate investors because you don’t have to pay any tax on your property. One of the biggest attractions for foreign investors who come from a tax qualifying country. Many key global residential markets have experienced rapid reform of property taxation over recent years, with additional purchase taxes and levies directed at foreign buyers.

Country/City

Income Tax on Rent (Effective Rate)

Capital Gains Tax (10 Yr Holding)

Round Trip Transaction Cost

US, New York

30%

5%

9.82%

Canada, Toronto

25%

25%

8.05%

Australia, Sidney

24.38%

45%

12.46%

Italy, Rome

17.25%

n.a.

16.13%

Netherlands, Amsterdam

13.42%

1.62%

8.25%

France, Paris

10%

33.30%

18.45%

China, Shanghai

5%

20%

5.35%

Egypt, Cairo

3.75%

n.a.

11.17%

Japan, Tokyo

3.4%

15%

9.60%

Monaco

1%

n.a.

17.57%

UAE, Dubai

0%

0%

6.01%

UK, London

n.a.

28%

8.03%

5

Bahamas

n.a.

n.a.

17.30%

Cayman, Grand Cayman

n.a.

n.a.

17%

  1. Buying a Property in Dubai Offers Higher Rental Yields. According to the report published by Global Property Guide, the below table represents average net rental yield % for the city above selected. Rental yield range offered by Dubai nowadays, can be 4.43% to 7.98% according our update historical analysis[ii], on last 8 years prices/rent trend per areas[iii]. Dubai sits at top with a very conservative average rental yield of 5.82%.

Country/City

Net Rental Yield                               (% per annum)

Remarks

Egypt, Cairo

9.09%

Excellent

Bahamas

8.16%

Excellent

Cayman, Grand Cayman

7.25%

Good

UAE, Dubai

5,19%

Moderate

Canada, Toronto

3.95%

Poor

Netherlands, Amsterdam

3.72%

Poor

US, New York

2.91%

Poor

France, Paris

2.79%

Very Poor

Japan, Tokyo

2.66%

Very Poor

UK, London

2.61%

Very Poor

Australia, Sidney

2.52%

Very Poor

Italy, Rome

2.37%

Very Poor

China, Shanghai

2.1%

Very Poor

Monaco

1.41%

Very Poor

 

[i] http://www.globalpropertyguide.com.  Buying Price per Square Meter, the Rent per Month (sq. m.), and the Gross Rental Yield are based on our yields research. Figures are typically based on the average for a 120 square meter apartment (in most locations – see mouse overs). The apartments are typically in a prime inner-city area, except in the Caribbean or Pacific.

[ii] Data updated from Reidin, https://www.reidin.com, Real Estate Information based on Dubai Land Department. 

[iii] Many areas are classified risky, according the upcoming and consolidate development. 

High Yield Advisors runs 1.3 million property portfolio simulations.

High Yield Advisors (HYA), a leading Real Estate investment organization based in Dubai has revolutionized the way they build real estate investment portfolios for their clients. 

HYA has developed and applies an algorithm that runs over 1.3 Million simulations for the selection and acquisition of the most profitable and risk-controlled properties for its clients.

The company has developed with the support of students from Paris-Sorbonne University Abu Dhabi, a complex and powerful mathematical matrix that enables them to simulate a multitude of real estate investment possibilities within the Dubai secondary property market.  

The mathematical algorithm runs 1.3 million simulations for investors seeking to create a profitable investment portfolio built upon real estate assets. The algorithm is able to compare and utilize the historical financial data of thousands of properties within different areas in Dubai. Exerting these results, HYA are able to calculate the best investment solutions for their clients.

The algorithm results are then overseen by the HYA board who ensure it is aligned with each clients’ individual strategy and risk profile, HYA apply an internal rating method based on key parameters to ensure the most valuable buildings are selected. 

This dual approach has proven to produce very reliable results in terms of the consistency of the profits and matching of investment expectations.

Patrick Parmeggiani, Founder, HYA, said: “Dubai has always been a place of rapid growth and development, making it difficult for investors to make the right decision on where to invest. We have bridged that gap to relieve investors of this problem by implementing a proven mathematical model. We often see investors decisions heavily influenced by the inviting marketing campaigns, however this approach can sometimes lead an under performing asset and compromise their investment experience in Dubai. The city has the capability of generating generous yields, and with our approach we make the investment experience transparent, profitable, and enjoyable for our investors.”

 

 

All rights related to the use of the trademark HYA are strictly reserved.
HYA is not a legal entity, but only a trademark owned and registered by Your Place Real Estate Broker (Rera Reg. No. 11651) created to support the services rendered by the latter and its partner companies.