Introduction
Over the past 5 years, Dubai’s real estate market has been on an upward trajectory experiencing rapid growth, presenting opportunities for investors across the globe, including Kenyans.
This has been driven by a number of factors such as business environment, safety & security, infrastructure, natural resources among others. In fact, a recent World Economic Forum report, The Travel & Tourism Development Index 2024, ranked the United Arab Emirates as the 18th best country for tourism development in the world.
In this article, we will explore Dubai’s real estate market, how Kenyans can invest and what to consider.
Kenyans in the UAE
There are about 50,000 Kenyans in the UAE, the majority of them being in Dubai. Most of the Kenyans are in Dubai for work, while a good number are doing business in the oil-rich state. With the country thriving in different economic areas, more Kenyans are planning to relocate to Dubai and other neighbouring Emirates.
This has not gone unnoticed as real estate developers and stakeholders have seen the interest Kenyans have in living, working, and investing in Dubai. They have been holding real estate open days in Nairobi introducing investors to projects, both completed and off plan.
Real Estate in the UAE
2025 is projected to be another record-breaking year for Dubai. This is according to an Engel & Volkers Middle East report that showed a continued trend of rising sales in luxury properties as well as a huge demand for both residential and commercial properties.
Of course, with such a surge in demand, the property values have skyrocketed. However, the rental yields have also gone up as the rent prices have significantly risen. The average ROI in Nairobi is about 7% before tax. In the UAE, that figure jumps to about 9% noting that Dubai does not have capital gains or rental tax, especially for individual owners.
There are 3 main benefits of investing in real estate in Dubai. Firstly, your returns are not taxed. Secondly, as mentioned before, the rental yield is higher than that of Nairobi, and thirdly, depending on how much you invest, you are eligible to get a UAE Golden Visa which gives you residency in the UAE.
How Kenyans can Invest in the UAE Real Estate Market
Investing in the Dubai real estate market requires some capital. It’s important to note that it is not for everyone. Most of the individuals that invest in Dubai have been investing in the Kenyan real estate market already.
With that said, let us look at some of the avenues of investing:
- Buying Completed Projects: This involves buying a property outright that has been completed, either through a developer or on the secondary market. Many developers offer attractive payment plans, making it easier for investors to acquire property.
- Off-plan Purchase: Dubai is known for selling a lot of off-plan properties. This is a good opportunity as you get to purchase the property at much lower prices.
- Real Estate Investment Trusts (REITs): REITs is another avenue of real estate investing. Investors get the opportunity to pool their money and invest in a portfolio of properties, earning a dividend every year. As an investor, you will own shares in a company that fully owns the properties invested in.
- Property Funds: Similar to REITs, property funds invest in real estate projects, providing investors with exposure to the market without the need for direct property ownership. You can invest in both REITs and property funds either through the stock market or through a fund manager.
An example of a project we can look at is one by DAMAC Properties, a new “riverside” community project in Dubai Investment Park that will offer unique amenities like hydroponic farms and a floating opera.
One-bedroom apartments in this development will start at Dh888,000 (approximately Ksh 32,500,000) and two-bedroom apartments from Dh1.42 million (approximately Ksh 52,000,000), with a 70/30 payment plan available.
If you would want to get more for your buck, then going further from Dubai will get you a bigger property for much cheaper.
A Note on Due Diligence and Financial Transparency
When investing in real estate, due diligence is one of the key things you need to do before committing your money and time. Ensuring that the developers or company you are dealing with have a clean record and are known to complete and handover projects successfully is important.
You need to understand the legal framework of the country as well as potential risks. Moreover, ensure that you are also being represented by a legal team that understands the Dubai real estate market.
Addressing Concerns about Money Laundering
With a lot of real estate projects and inadequate oversight of money coming in, Dubai has also attracted individuals who launder money. A report known as Dubai Unlocked uncovered instances where some Kenyans, including people connected to government institutions, have acquired expensive properties in unclear circumstances a few years after being employees of the government.
While most transactions are legitimate, there are such instances of unethical conduct, underscoring the need for investors to be very sound and responsible when investing.
It’s important to emphasize that these are allegations, and individuals are presumed innocent until proven guilty. However, these reports serve as a reminder of the need for vigilance and ethical investment practices.
Conclusion
As we said earlier, investing in Dubai’s real estate market is not for everyone. However, if you are fortunate enough to have the capacity to do so, then this would be a good opportunity.
With that said, the market has a wide range of options from luxury apartments to more affordable options that align with your financial capabilities. Remember to conduct thorough due diligence and ensure that you are taking part in a legitimate transaction.
