Dubai's luxury market best for long-term investments, says Core Savills

There is strong long-term investment potential in Dubai’s prime segment, reinforced by low taxes and investment costs, according to a new report from Core Savills.

According to Core Savills, only a small fraction of residential transactions in 2017 were in the prime sector, with property prices in the prime and ultra-prime market among the lowest of any comparable hub around the world.

“Despite the popular global assumption that the majority of Dubai’s real estate stock and transaction volumes are concentrated in the prime and luxury end of the market, this sector represents just a small portion,” Core Savills CEO David Godchaux said. “In fact, only 3 percent of residential transactions in 2017 were concluded within this segment.”

Notably, prime properties in Dubai are approximately 40 percent less expensive than in Singapore, and 50 percent less than in Moscow or Paris, with buying and selling fees of 8 percent comparable to Shanghai and Mumbai, compared to 32 percent in Hong Kong and 20 percent in Tokyo.

“The long-term investment potential in Dubai’s prime segment is reinforced by a nominal tax regime is reinforced by a nominal tax regime and notably low real estate investment costs,” Godchaux noted.

“These costs, associated with buying, holding and selling property, can detract significantly from an investment and essentially erode the attractiveness of an asset,” he added.