Dubai’s ‘super stable’ status ensures its real estate market keeps attracting Pakistanis

The interest of Pakistanis in Dubai’s real estate has pivoted a tad from buying properties for investment purposes to looking to relocate in the city, said an official at renowned developer DAMAC Properties, even as the emirate’s red-hot housing market attracts an assortment of clients rushing to clinch a home in one of the world’s most “super stable” cities.

“Dubai has always been an attractive place for Pakistanis to invest because it’s very close and super stable, unlike Pakistan,” Faisal Karim, sales director at DAMAC Properties that is listed on the Dubai Financial Market, told Business Recorder in an interview.

Dubai a ‘natural’ fit for Pakistanis looking to buy property abroad

There is “financial stability where the currency doesn’t fluctuate because the dirham and the dollar are fixed,” he said. Since 1997, the AED has been pegged to the US dollar at a fixed rate of 3.67 to 1, a key factor behind the ability to attract foreign inflows.

“People also like that there’s no taxation on income, and rental yields are typically pretty high here as well.”

Dubai has become a magnet for ultra-rich investors with Russians, fleeing the impact of sanctions after the Ukraine war, being the biggest foreign buyers on the city’s property market last year, according to brokerage firm Betterhomes.

Pakistanis remain among the top buyers as well and while Karim acknowledged the ‘ticket size’ may have gone down to rupee’s record depreciation, the interest has not diminished.

“Currency depreciation has really affected people,” said Karim, who has been with the property developer for the past four and a half years.

As Dubai’s real estate market booms - the Land Department recorded real estate transactions worth more than AED2 billion on Nov 1 alone - Pakistanis on the hunt on average have a budget of AED1 million, down from AED2-2.5 million due to rupee’s chronic weakness.

The buying patterns have also been affected by Dubai’s property surge. In the year to June 30, prices rose at their fastest in almost a decade, climbing by 16.9%, as per property consultancy CBRE.

But Pakistani interest has remained as high as ever as investors as well as those looking to relocate look for a ‘safer’ haven.

“Pakistanis might still be a little bit more skewed towards investment, but still there’s many that are moving to live here,” said Karim as he compared global trends to Pakistan.

“There’s 200 plus universities here from the west. They want to move here so their children can go to those universities. If they can’t get to London or the UK to US Canada, this is a great alternative for them.”

Karim said Dubai offers “the safety, security, luxury, lifestyle, quality of a balanced level of living” that prove to be further attractions.

Karim, who spent most of his life in Florida before moving to the Middle East, said: “Anything that you possibly could want and imagine is here. The best of the west and the east combined is here.

In terms of age, most Pakistani buyers are usually in their 40s or above, although there are some in their mid to late 30s who are also interested.

“People with families tend to buy more because they want their children to have a better future. That’s the biggest and most important factor,” Karim reiterates.

‘You’ve got to have a passport and money, and that’s it’

Karim notes that while in the west it could take two-three months to close on a property due to many checks and clearances, in Dubai, the process is much more streamlined.

“You visit the site, look at the project, look at a particular unit, whether it’s under construction or ready, and you could close on a deal if the price is agreed upon within a matter of a few hours, and documents could be printed out and signed for and done.

“You’ve got to have a passport, you’ve got to have money, and that’s it.”

When asked if Pakistanis face any challenges, Karim says the biggest one is transferring their funds.

Despite the hindrances in flow of capital, Pakistanis remained the seventh biggest buyers of Dubai property in the second quarter of 2023, according to the Dubai Residential Real Estate Market Report Q2 2023 by Betterhomes.

Golden visa an added attraction

On a global level, Karim said that it used to be 25% people that were buying to live and 75% were buying to invest.

“Now it’s the other way around, where it’s almost 80% are buying to live here and 20% are buying as an investment.”

The reason for this is that the investment requirement for a golden visa - a long-term residency visa that enables foreign talents to live and work or study in the UAE for up to 10 years - has been cut down from AED10 million to AED2 million, a significant reduction making it accessible to a lot more people.

“If you invest 2 million dirhams now with the Golden Visa, people can stay here for ten years along with their family members, including sponsoring their parents, which has really attracted a lot of people from across the world.”

He also notes that the ultra-luxury segment in Dubai is the market that’s blossoming the most - purchases that are AED10 million and above.

Last month, property consultancy Knight Frank said sales of homes worth $10 million or more in Dubai hit about $1.6 billion in the third quarter, up from $1.13 billion in the same period a year ago.

“At DAMAC, we have this term we use: ‘floating sky villas’ - apartments on high floors - starting from the 20th and going up to the 70th floor, ranging from 4,000 to 15,000 square feet in size with private pools and private elevators.

“This segment has grown the most. This has attracted a lot of the ultra-wealthy from across the globe to Dubai.”

However, he added that DAMAC does not target any one demographic.

“We have different types of products, projects and locations. So we go after the ultra-luxury buyer, the luxury buyer as well as the smaller ticket buyer. We have the products to go after the low ticket buyer as well.

“We have clients that only want to buy low tickets even though they have a lot of money. They want to buy small and they’ll buy multiple units. So we attract many different types of investors”.

Govt ensures consumers are protected

Karim says the government is “super conscious” and “super proactive” in ensuring that the buyers are looked after.

“The advent of the escrow accounts - where a developer has to pay a portion of the project to start off the project before they start selling - really comforts the investor, which wasn’t the case 10-15 years ago when the crisis had come through in 2007 and 2008 where people had lost the shirts off their backs.”

Copyright Business Recorder, 2023