Demand for property in Dubai is expected to surge following the recent announcements of two radical regulatory changes. We look closer and reveal why 2018 is an exciting time for investors there…

Investing in Dubai’s buzzing property market got even more attractive last month after the United Arab Emirates Government revealed plans to relax restrictions on foreign-owned companies and introduce longer visas for certain groups of foreign residents.

Under the new rules, foreign citizens will be able to own companies anywhere in the UAE, including Dubai, outright. The new ownership freedoms should take effect in the last quarter of 2018 and initially will be applicable only to firms operating in key sectors, likely to be manufacturing and service industries. Currently, only companies registered within special ‘free zones’, such as the Dubai International Finance Centre, can be 100 per cent owned by non-Emirati citizens although this option still comes with limitations.

At the same time, the UAE Government is launching a new 10-year visa for qualifying investors, students and top professionals in medical, scientific, research and technical fields, also available by the year-end. Under existing rules, foreign residents are limited to two-year visas, which they must renew to remain in the Emirate.

“This is big news,” said Paul Kelly, operations director at leading Dubai estate agency Allsopp & Allsopp. “The current rules mean that foreign companies outside of free zones, which is the majority of them, must be 51 per cent owned by a local Emirati sponsor. Without this restriction, we anticipate Dubai and the UAE becoming more appealing to foreign businesses, which in turn should attract more non-Emirati workers and expats, and boost demand for property. And the availability of longer visas should hopefully help the Dubai expat community feel less transient, encouraging people to put down more permanent roots here.”

Meanwhile, 2018 sees Dubai purge ahead with plans to grow its status as one of the world’s leading tourist destinations. This in turn is creating opportunities for investors in its holiday let market.

“Right now, we’re helping a client buy 25 key-ready apartments in Jumeirah Beach Residence,” continued Mr Kelly at Allsopp & Allsopp. “The deal is worth a total of £6-£6.5million. As soon as the client completes he intends to put all the properties on the Airbnb market. Their location makes them ideal for holidaymakers. Another recent client bought a penthouse on the Palm Jumeirah for more than AED 40 million (£8million).”

Jumeirah Beach Residence (JBR) is an upmarket waterfront community and one of Dubai’s most sought-after residential areas. With a beach on one side and Dubai Marina on the other, it is next to the manmade Bluewaters Island, where the world’s largest ferris wheel and first ever Caesars Palace hotel outside of Las Vegas both open later this year.

Elsewhere, La Mer on Jumeirah Beach is typical of the type of development happening throughout Dubai at the moment. “It’s a lovely beachfront area with lots of shops, cafés and restaurants,” continued Mr Kelly. “And the beach is amazing with a water park and lots of water-based activities. There are more and more of these types of places springing up all the time. Dubai is still a young city that’s growing. Approximately 60 per cent of property sales in Dubai in 2017 were off-plan and the market here remains still investor driven.”

That said, Mr Kelly points out that the end-user sector of the market, which includes clients buying resale or key-ready properties for their own use, is growing. Arabian Ranches is typical of Dubai’s established communities that are popular with today’s end-user purchasers. Prices there range from around £290,000 for a two-bedroom villa to £3,000,000 for a seven-bedroom villa. Like many communities, it has its own school, shopping centre and medical centre.

Investors in Dubai typically opt either for a high value off-plan property located in a prime central location, where they can expect strong capital appreciation, or they choose a resale property a little further out that delivers an immediate return, with typical rental yields of 7-9 per cent.

“For off-plan investors, Dubai Hills Estates is one to look at,” said Paul Kelly. “It’s a huge villa community about 15 minutes from the beating heart of downtown Dubai and the famous Burj Khalifa tower. Prices there range from around £140,000 to £8,000,000, or you can buy a plot for around £6,000,000 and self-build.”

Otherwise, one of Dubai’s most anticipated developments is Dubai Creek Harbour, a master-planned town that will have waterways between the buildings and include a tower that once complete will overtake the Burj Khalifa as the world’s tallest. “Dubai Creek Harbour is expected to become one of the most desirable residential areas in Dubai and we anticipate its rental appeal to rival Downtown Dubai,” said Mr Kelly. “We’re selling off-plan properties there ranging from £225,000 to £1.65million.”