Since the COVID-19 pandemic, Dubai has established itself as a preferred destination for tourism and migration from residents worldwide. Since 2021, real estate prices have risen by an average of 15% per year, starting from a comparatively low level relative to European metropolises. Nevertheless, property prices in Dubai remain very moderate by international standards.

Due to its classification as an emerging market and the previously low emphasis on ESG topics, international institutional investors have been relatively underrepresented among buyers. This is now changing: on one hand, new regulations have been introduced to make the location more attractive for REITs, and on the other hand, large-scale investments by Asian institutional investors, particularly in the built-to-rent market, are taking place.

Against this backdrop, Dubai offers many indicators pointing to a strong increase in demand over the coming years. For example,

• The UAE is experiencing significant population growth. Dubai’s population is projected to reach 9 million by 2040 (currently 3.5 million).
• The UAE is attracting the highest number of High Net Worth Individuals (HNWIs) worldwide.
• According to forecasts from the International Monetary Fund, per capita GDP is expected to grow significantly faster in the medium term than in any EU country or the USA.
• According to UBS Bank’s Global Real Estate Bubble Index, the risk of overvaluation or a real estate bubble in Dubai is the third lowest among the 25 world cities examined. Unlike cities like Zurich (bubble risk), Munich, Frankfurt, and London (overvalued), Dubai is classified as “fair valued.”
• A first-class infrastructure, low inflation, high safety, affordable energy, attractive tax rates, and a high lifestyle factor all support long-term economic growth.

Currently, existing properties offer rental yields of approximately 6-8% net, in addition to capital appreciation. With new builds (so-called off-plan projects), even higher rental yields and appreciation are possible. This largely depends on the type of property and its location. German Partners provides investors with comprehensive data in this regard.

The ratio of relatively high disposable income in the population to rent levels is currently among the best worldwide.