Indian buyers flock to Dubai for higher rental yields

Meteora Developers

• Indians were top foreign buyers in Dubai last year
• Rental yields more than double those in India
• Indian investors’ spending increases 15% year on year

With more wealthy Indians moving to the UAE and rental yields in the Gulf state more than twice the size of those in India, interest in purchasing real estate is set to continue to rise.

Indians were the top foreign buyers in Dubai last year, spending more than those from Russia, China, Pakistan and the UK, according to property portal Realiste.

The region’s reputation was helped by reports late last year that billionaire Mukesh Ambani had bought a villa on Palm Jumeirah for anywhere between $80 million and $163 million.

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For the launch of its latest $20 billion master project, meanwhile, Dubai developer Emaar chose Bollywood superstar Shahrukh Khan to be guest of honour at its VIP launch earlier this month.

The decision to pick Khan to be the face of the Burj Khalifa developer’s marketing drive was no coincidence. Indian buyers have dominated the Dubai real estate market for decades.

The actor described Dubai as “a great metropolis that has become one of the world’s most famous, elegant and advanced cities.”

Emaar

Real estate agency Unique Properties reported that the trend has continued. It said Indian investors accounted for one-fifth of all Dubai property transactions in the first three months of this year, and their spending had increased 15 percent year on year over the period.

“Indians will continue to be a driving force for years to come,” Arash Jalili, CEO of Unique Properties, said.

“Additional Indian-imposed tax collections are incentivising Indians to invest in countries like the UAE where they can avail favourable tax advantages,” he added.

On top of tax benefits, said Praveen Sharma, founder and CEO of Meteora Developers, one of the biggest motivators for Indian investors was the more attractive rental yields in Dubai. Meteora this month launched two towers in Dubai, which sold out in days.

UAE landlords can earn an average return of 7 percent per annum, compared with an average of 2.7 percent in India. 

Sharma said there was also a mindshift among Indian expats living in the UAE, with the average age of buyers jumping on the property ladder getting younger.

“This is an age group that loves to lead a minimalistic lifestyle, preferring smaller homes, especially one-bedroom apartments, that may be affordable but still luxurious,” he said.

Data from Realiste showed that 40 percent of Indian buyers in Dubai already lived in the UAE, but earlier this year the Henley Private Wealth Migration Report found that a growing number of wealthy Indians were moving to the Gulf state.

The UAE had the highest net inflow of millionaires in the world in 2022, and that number is set to be swelled this year by super-rich Indians.

Last year a further 5,200 high net worth individuals (HNWI) relocated to the Emirates than left, according to the report.

The study forecasts a net inflow of 4,500 HNWIs – people with wealth of more than $1 million – to the UAE in 2023.

Most are expected to arrive from India, with others coming from the UK, Russia, Lebanon and Pakistan.