Dubai is changing, as families from the UK and beyond are remaining long-term, according to a real estate expert based in the city.
What is more, the city is producing new apartments that can facilitate newcomers gaining a golden visa without breaking the bank.
PropertyWire spoke to Alex Johnson, CEO of investment firm Alexander Johnson Group, who has 20 years’ experience of living and working in Dubai, United Arab Emirates.
He has facilitated property purchases for wealthy buyers. Meanwhile he has worked on commercial transactions for office buildings and hotels, land plots and logistics centres.
Shifting demographics
Johnson has experienced a demographic shift in his own business.
He said: “We’re getting a lot of youngsters here. I have a Swiss guy on my team who’s 22.
“20 years ago he would have come to the US or London.”
Older people are also sticking around.
Johnson added: “People are not leaving anymore. This used to be an expat posting where you get sent by your employer before going to Singapore.
“Nowadays people’s kids are being born here; growing up here. Many leave to go to university but the kids come back.
“People want to stay and retire here. I just helped a 72 year old guy who wanted to sell his villa and buy an apartment.”
The Dubai appeal
For Westerners it helps that Dubai is more liberal in terms of alcohol compared to other Emirates, as well as the neighbouring Saudi Arabia.
In the city non-Muslims can purchase a license and consume alcohol within hotels, at home, or in other designated areas.
In contrast the neighbouring Sharjah is a ‘dry Emirate’, while Johnson said Abu Dhabi is more socially conservative than Dubai.
Anecdotally Johnson reckons Brits make up the majority of buyers in Dubai, while in the luxury property market Swiss and German people are the most common buyers.
Johnson’s wife is from Kazakhstan, highlighting how the city attracts people from across the world.
Tax and safety
On being asked why people were moving to Dubai, Johnson said: “The answer is over taxation, over regulation, lack of perception of safety in European countries; things not working as well as they used to be.
“In Dubai you can come and set up a business – it’s very entrepreneurial.”
In the city there’s no income or capital gains taxes – all there is to pay is a 9% corporation tax for businesses.
Safety is another factor, as Johnson added: “I got married in Las Vegas last year and spent a couple of days in San Francisco.
“It’s not safe, and there are drug-addled people all over the place.”
It’s difficult for foreigners to acquire an Emirati passport, as you have to reside in the country for 30 years minimum.
However you can acquire a 10-year golden visa by purchasing a €500,000 property, which you can easily renew.
Johnson said there are some relatively affordable developments being built, like 3-bed partments for €750,000, which could provide newcomers with the visa and a place to live in one fell swoop
‘Market is NOT overleveraged’
A long criticism of Dubai is that it’s an overheated and overvalued property market that could one day collapse.
Indeed, a quick Google search of ‘Dubai property market’ reveals a number of Reddit threads debating that very subject.
However Johnson retorted by estimating that the property market in the city is made up of 70% cash and 30% finance, meaning large swathes of the market wouldn’t be impacted by a steep interest rate increase.
He said: “Whilst it appears the market has been going up and up – it’s been going up in a sustainable way.
“Even if interest rates rise it doesn’t negatively impact the market here in the same way it does elsewhere.”
Dubai house prices far exceeded other major cities in the past year, as property prices inflated by 16.5% annually.
Criticism of the Dubai market may have been more justified in the past, as Johnson said the regulatory infrastructure is far better now than it was in 2008-9.
The UBS Bubble Index – which analyses property prices across various cities to ascertain whether there’s a housing bubble – placed Dubai in the ‘moderate risk’ category in September 2024.
UBS reckoned Dubai has grown more risky than last year, but still felt it has far less of a ‘bubble’ than cities like Miami in the United States, as well as Tokyo in Japan.
The ‘next’ Dubai
Johnson was asked what the future holds for Dubai, and whether we could see the ‘next’ Dubai in the region.
Within the United Arab Emirates Johnson spoke about Ras Al-Khaimah, an Emirate that is granting its first casino license, with the first casino opening in 2027.
However Johnson reckoned talk of the Emirate ‘taking off’ and becoming a new Dubai are somewhat exaggerated.
He said: “A lot of people are overselling Ras Al-Khaimah.
“Other growing regions include Doha in Qatar – but the reality is you can’t drink [which is one factor that limits the appeal].
“The blunt answer to your question [will there be a new Dubai] is not any time soon.”
In terms of within Dubai, Johnson said the city is building further inland, so that’s where we could see more developments in the years ahead – which should complement construction projects by the ocean.
