WORDS: JANE MAYNE :: IMAGES: SUPPLIED
The Dubai market has performed exceptionally well, and property values keep rising.
Many South African property investors are expanding their property portfolios by adding Dubai to the list. While the most expensive sale last year clocked in at just under a staggering R3 billion (AED 598 million), for a beachfront villa in Palm Jumeirah, property is still affordable for SA buyers.
Prices start from around R2.3 million (AED 450,000), but if you want UAE residency which will give you a UAE bank account, one needs to invest a minimum of close to R4 million (AED 750,000).
Nombasa Mawela, licensee for Seeff Dubai, comments that, “from a cost comparison perspective, the R4 million-plus range equates to what you will pay for a house in an upper middle-class neighbourhood in South Africa, and there are now finance options available.”
Non-UAE residents can now qualify for a mortgage of up to 75% of the purchase price. Developers are also providing flexible payment plans of up to five years for those not wanting amortgage. Mawela adds that ROI on property investments is among the highest in the world.
Affluent Dubai Marina is popular with expats due to its mix of sandy beaches and dynamic social life. Jumeirah Golf Estate is also favoured by expat families, especially those who prefer outdoor and play areas for children.
The tree-shaped Palm Jumeirah island is home to some of Dubai’s top luxury resorts, and also boasts the most expensive oceanfront villas in the city. Downtown Dubai, which is known for the tallest building in the world – Burj Khalifa, is another popular area. The locale includes a busy shopping and tourist hub which is central to most facilities.
Property types vary from apartments to luxury villas with prices ranging from around R2.3 million (AED 450,000) for a basic studio depending on the location and amenities. A one-bed unit ranges from around R4.5 million (AED875,000), and villas from around R14.3 million (AED2.8 million).
Mawela says, “The market has performed exceptionally well, and property values keep rising with just about no upper limit these days, as is evident from the Palm Jumeirah villa sale.”
South African property investors tend to look for property around the R10 million price mark. This also enables them to open a bank account and to get residency in the country if they wish.
Impressive ROI stats
During a recent two-day visit to Durban, Seeff’s Dubai Office secured several sales and notable interest from South African property investors. Buyers keen to invest in this booming property market were mostly entrepreneurs from different industries, as well as experienced and upcoming property investors.
Sales were predominantly luxury apartments, priced upwards of R10 million bought off-plan. Mawela highlights that the real attraction is the flexible interest-free payment plans offered over periods of 5 to 7 years by the developers, rather than the buyers needing to mortgage properties which would attract interest.
The properties were all purchased for investment purposes. Market growth graphs, which projected impressive ROIs over the past few months, were a definite motivation. These showed massive growth of almost 50% from 2022 in property prices which has created investment confidence.
This is echoed in recent reports in Bloomberg and Financial Times, which state that the Dubai property market continues its booming pace with property values continuing to rise at a record pace amid strong demand. This is as many of the world’s richest individuals are turning to Dubai as a financial haven.
Mawela says the off-plan developments are particularly well suited to the South African market. “This is due to their flexible payment plans and higher possibilities of being reinvested in the market. The sales were two-bedroomed units selling for AED 2.88 million (about R14 million).”
“The properties were purchased for investment purposes to capitalise on the strong short-term rentals market, mostly through Airbnb and Bookings.Com, as well as the rising demand for long-term residential rentals in the city of Dubai.”
The different types of visas which come with property investment, particularly the golden visa have also become an attraction for investment in property. “The reality of being able to have a standing visa for up to 10-years and the ability to host your family, has attracted even more potential investors.”
“Another drawcard for these buyers is the ability to open an offshore personal and business bank account in Dubai. Our buyers for this roadshow included young entrepreneurs, upcoming and experienced property investors in South Africa, who now wish to diversify their portfolios, but we expect those looking for economic opportunities in Dubai will also be drawn to investing in property.”
“It is also relatively easy and straightforward to purchase property, especially the off-plan developments and there are a number of these available offering various properties from apartments to luxury villas. Assistance is provided every step of the way for buyers and investors,”she concludes.