Compared to Portugal, Cyprus and Australia, Dubai offers better returns and a great life
Last week His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai launched the five-year “Retirement in Dubai” programme, a first-of-its kind partnership between Dubai Tourism and the General Administration of Residency and Foreigners Affairs. Under this initiative retirees from around the world can apply for a retirement visa in Dubai. But the initiative is equally attractive for Dubai’s sizeable expat population. Elaine Jones, executive chairman of Asteco Property Management says the “Dubai-expat retiree” is now a growing section of the population.
Julian Roche, chief economist at Cavendish Maxwell says, “As of last year the Dubai Statistics Centre estimated that there are more than three million expatriates living and working in Dubai alone. An equal number are to be found in the other emirates and a growing number of those are approaching retirement age. Not all of them, by any means, will want to return ‘home’ to countries where they no longer have strong connections.”
Enjoy higher yields
Few places in the world offer an ease of living as does Dubai, says Elaine. The emirate has superior healthcare facilities, is safe and has great lifestyle offerings. “You can even have a live-in house help here or even home-nursing care, important to people in the retiring age bracket. In addition, the weather and leisure facilities such as golf courses, marinas and clubs for fitness and social interaction tick the right boxes. Ease of travel and proximity to Asia as well as Europe further enhances the value proposition of Dubai as a retirement destination,” she explains.
From a real estate perspective, the Dubai Retirement Visa represents a significant opportunity for retirees worldwide to improve both their financial returns and quality of life, explains Roche. “Even the average London homeowner, for example, can move to Dubai or Abu Dhabi with enough to spare to buy an income-generating apartment. Investment property in the UAE earns higher gross yields than European countries – on an average, one-and-a-half times that of London. Without tax, net yields are even higher,” he says.
Also property buyers still get more space, as price per square metre is around four times more expensive in London than Dubai or Abu Dhabi. “Comparable offerings in traditional retirement destinations such as Portugal, Cyprus or even Australia are largely outside major cities, whereas the UAE offers vibrant world-class urban life. Retirement in the UAE is an enticing prospect,” explains Roche.
Mandana Dabbagh, managing director of Ayana Properties says, “A typical rental yield in the heart of Dubai is now around 5 per cent and can reach up to 10 per cent in more suburban locations. Therefore, with a few smart investments within the property market, retirees can gain a healthy income to fund their lifestyle.”
Earn Dh20,000 monthly
For a five-year Dubai Retirement Visa, you will need to have a monthly income of Dh20,000, savings of Dh 1,000,000 or ownership of a property worth Dh2,000,000. “To achieve a monthly income of Dh20,000 from your property investment, I would recommend a portfolio of four or five small villas at an average capital value of Dh1,100,000, each generating an income of approximately Dh60,000-80,000 per annum. Although apartments are also available at the same gross return, the net is lower due to utility costs. Alternatively invest in hotel apartments where the yield is guaranteed at, for example, 8 per cent net of all expenses. Here the hotel operator takes full responsibility for the property and the investor receives payment without any involvement,” advises Elaine.
Recent relocation trends
Talking about recent trends, Mandana says, “Our sister company Atlas Homestays has seen an increase in demand from families staying with us for a short period of time (between one and three months) while they look to purchase a family home. We recently accommodated an elderly couple from Lebanon who stayed with in a holiday home for a month until they found a suitable family home at Dubai Hills to settle for their retirement. This trend is not just restricted to expats from neighbouring countries. We are seeing similar trends from Europe and even as far out as USA. A French gentleman recently stayed with us through the summer while he purchased a family home in Downtown Dubai to move his family next month. Our clients across the world have expressed the desire to relocate to the UAE due to the safety it offers, a superior healthcare system, as well as a virtually non-existent crime rate.”
Recent forecasts have shown that there will be 18m people over the age of 60 years in the GCC by 2050, which is driving growth in the Middle East pharmaceuticals industry as well as a growth in retirement-based investment. Mandana says. The Covid-19 pandemic demonstrated the UAE’s superior ability to handle a crisis. “I personally think this served as a wake-up call to many high-net worth individuals across the world as well as to individuals across the working class,” she says.