International Investment

INVESTING IN DUBAI FROM SAUDI ARABIA

SAUDI ARABIAN INVESTMENT INTO DUBAI PROPERTY

Dubai property has been and will continue to be one of the most sought-after investment destinations for Saudi investors. Since Dubai opened its doors to overseas investment two decades ago, Saudi investors have recognised its potential, making significant investments in the emirate’s property market and its GCC neighbour.

DUBAI'S STRONG APPEAL TO SAUDI INVESTORS

As well as the familiarity, Saudi investors have been drawn to Dubai’s property market due to its strong performance and potential for high returns. With a robust economy and thriving real estate sector, Dubai has consistently ranked among the top-performing property markets globally, making it an attractive investment option for Saudis looking to invest outside of their domestic market.

As Saudi Arabia continues to diversify its economy and implement ambitious initiatives such as Vision 2030, Saudi investors are seeking opportunities beyond their home market. Dubai’s vibrant economic landscape and growth prospects make it an ideal choice for Saudi investors looking to expand their investment portfolios.

KEY REASONS AND STATISTICS FOR SAUDI INVESTMENT IN DUBAI PROPERTY

Investment volume

The special relationship between the UAE and Saudi Arabia extends to various areas, including real estate and the Dubai property market has experienced significant growth thanks to the notable contributions of Saudi investors.

This is exemplified by the presence of 20 exhibitors from the UAE among the 50 at Cityscape Jeddah as far back as 2016, while Saudi delegates comprised the largest foreign visitor group at Cityscape Dubai 2017.

More pertinently, according to the Dubai Land Department (DLD), Saudi nationals invested a substantial AED 7 billion in the UAE in 2017, which made Saudi Arabia the second-largest investor in UAE real estate after India, which invested AED 15.6 billion.

Preferred property types

Data Bayut confirms that like most investors Saudi investors acquire apartments at a higher rate than villa and townhouses with a preference for 4 apartment acquisitions to one villa acquisition.

That said, on an individual basis, Saudis will invest in luxurious villas, upscale apartments, commercial properties, and even hospitality sectors, diversifying their holdings and capitalising on Dubai’s diverse real estate offerings

Rental yields

Dubai’s property market offers attractive rental yields, providing Saudi investors with the opportunity to generate consistent rental income. Compared to other investment options, including prime properties in Saudi Arabia, Dubai’s rental yields can reach around 7%, making it an appealing prospect for Saudis.

Long-term performance outlook

Dubai’s property market has displayed resilience and sustained growth. Recent years have witnessed double-digit capital gains and a surge in industry sales transactions, surpassing even pre-pandemic levels. This positive performance outlook assures Saudi investors of the potential for long-term returns on their investments.

Streamlined investment environment

Saudi investors benefit from a favorable investment climate in Dubai. The emirate has established efficient regulations and processes to attract foreign investors, including Saudis, making it easier to navigate the investment landscape and facilitate property transactions.

Strategic partnerships

Saudi Arabia and Dubai have established strong bilateral relations, resulting in strategic partnerships and collaborations in various sectors, including real estate. These partnerships provide Saudi investors with additional confidence in their Dubai property investments.

Economic synergies

Both Saudi Arabia and Dubai share a commitment to economic diversification and development away from a purely oil-based economy. Saudi investors recognise Dubai’s efforts in diversifying its economy and the opportunities it presents for cross-border investments aligned with the objectives of Vision 2030.

Seeing the progress Dubai has made with this bold vision and the role that real estate has played within it, gives many Saudi investors the confidence they need to make their first acquisition in a new country.

WHERE ARE SAUDIS AND OTHER INVESTORS BUYING DUBAI PROPERTY?

Business Bay comprises approximately 15% of the Dubai property market, offering a range of properties with an average price of AED 1.2 million.

Downtown Dubai represents around 8% of the market, providing investors with a variety of properties at an average price of AED 700,000.
Jumeirah Village Circle accounts for approximately 8% of the market share, featuring properties with an average price of AED 1.1 million, making it an attractive investment option.
Dubai Marina holds a market share of about 6%, offering a selection of properties at an average price of AED 1.5 million, catering to the preferences of Saudi investors.
Dubai Creek Harbour represents around 5% of the market, featuring properties with an average price of AED 2 million, providing potential investment opportunities for Saudi buyers.
Arjan holds a market share of approximately 4%, offering properties at an average price of AED 700,000, making it an affordable option for Saudi investors.
Dubai Hills accounts for about 4% of the market share, providing luxurious properties at an average price of AED 2 million, catering to the discerning tastes of Saudi buyers.
Palm Jumeirah represents around 4% of the market, offering prestigious properties with an average price of AED 3.3 million, presenting exclusive investment possibilities for Saudi investors.
Jumeirah Lakes Towers holds a market share of approximately 3%, featuring properties with an average price of AED 1 million, providing diverse investment options for Saudi buyers.
Al Furjan represents about 3% of the market, offering properties at an average price of AED 900,000, making it an affordable investment choice for Saudi investors.

STRONG SAUDI INVESTMENT IN DUBAI PROPERTY SET TO CONTINUE

With its strong appeal, favourable investment climate, and promising economic outlook, Dubai continues to attract substantial Saudi investment, cementing its position as a preferred destination for Saudi Arabian investors seeking lucrative opportunities in the real estate sector.

Additionally, Dubai’s strategic location and its hospitable reputation as a global business hub make it an attractive investment destination for many in the neighbouring GCC.

This drives demand for residential and commercial properties, ensuring a consistent rental market and potential for long-term capital appreciation.

Furthermore, the UAE’s close relationship with Saudi Arabia, both politically and economically, fosters an appealing investment climate for Saudi investors. The existing bilateral agreements and cooperation between the two countries facilitate trade and investment opportunities, making it easier for Saudi investors to navigate the Dubai property market.