Real Estate Investment in London Vs Dubai

10 May 2024
Dubai
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Real estate is among the most lucrative industries globally. It is often considered a safe investment compared to other options with a potential for great ROI. Two of the most prominent cities globally for real estate investment are London and Dubai. Both have vibrant real estate markets with unique dynamics. Let us do a comparative analysis of real estate investment in Dubai vs London to help investors make an informed decision.

 

Economic Insights:

The UK is one of the biggest economies in the world driven by a transparent regulatory mechanism. The uncertain situation after Brexit has settled down and the economy has proven to be resilient. 

UAE has a diversified economy reducing its reliance on oil revenue. Expo 2020 Dubai has boosted the economy by awarding AED 6.8 billion of contracts to SMEs. Ambitious plans like D33 Dubai 2040 Urban Master Plan have the potential for excellent future growth.

 

Property Types:

There are various types of properties available in London's real estate market ranging from historic Georgian mansions in Chelsea to modern apartments in Canary Wharf. 

Conversely, Dubai provides cutting-edge architectural marvels, encompassing villas, penthouses, townhouses, apartments, and studios.

 

Taxation:

London imposes 18 to 28% tax for capital gains from real estate which is not a very favorable number for the investors. 

On the contrary, Dubai has zero tax on income, property and capital gains making it an ideal place for real estate investment.

 

Rental Incomes:

London offers a rental yield of 5-6% whereas the Dubai real estate market offers up to 9% yield in some areas. The estimated forecast of percentage rental growth (2024-2028) for Dubai is much better compared to London.

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London Percentage Rental Growth (2024-2028)

The 2024-2028 forecast for London shows a declining trend. The maximum rental growth is forecasted for 2024 at 5.5% and then gradually dropping to 3.5%, 3.0%, 2.5% and 2.5% subsequently.

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Dubai Percentage Rental Growth (2024-2028)

A steady growth of 5.33 is expected for Dubai from 2024 to 2028 showing the stability of the market.

 

Residency Through Real Estate Investment:

Buying property in the UK does not guarantee residency. In London, the immigration status will remain the same despite real estate investment.

In Dubai, residents who invest USD 204,000 or more in real estate are eligible for a 2-year visa. A ten-year Golden Visa is available to those who invest more than USD 544,500.

For those looking to invest in real estate, London and Dubai are always among the best options. London's real estate market offers a wide variety of properties and has an efficient regulatory mechanism. 

On the other hand, Dubai's real estate market offers larger rental yields and a thriving luxury sector making it a more attractive option for investors.

 

Source: Statista, KnightFrank