Demand for Dubai’s property from European customers is rising and is expected to continue into next year as more people from Europe move to the UAE amid strong economic growth.
“The customer base has shifted today, the biggest customers are coming from Europe, no longer from Russia or Ukraine, and we believe that's going to continue, and it's going to grow further into 2025,” Ali Sajwani, managing director of Damac Properties told The National.
The slowdown in Europe’s economy, introduction of new taxes and changes to domicile and non-domicile resident rules in the UK, among other factors, are contributing to more Europeans moving to Dubai and setting up business in the emirate, Mr Sajwani said.
This trend is “driving the mid- to high-end property market (houses costing between Dh3 million to Dh8 million)”, Mr Sajwani said.
The UAE property market has been booming in recent years as more people buy property.
The government initiatives such as residency permits for retired and remote workers and the expansion of the 10-year golden visa programme and overall growth in the UAE’s economy due to diversification efforts is also supporting the property market.
During the third quarter, average prices in the Dubai residential market rose close to 20 per cent year-on-year, underpinned by a 19 per cent rise in average apartment prices and a 23 per cent increase in average villa prices, according to a report from CBRE.
“Europeans remain the main source of investors for Dubai’s residential sector, with UK nationals continuing to lead the way,” Matthew Green, head of research at CBRE Mena, said.
“This steady flow of outbound capital has been supported by a regime of high property and income tax rates across much of Europe and expectations of further increases following recent announcements, combined with ongoing fears over safety across many cities and the diminishing quality of life for many residents due to the residual impact of high inflation, high interest rates and stagnation in salaries.”
In October, Britain's first female chancellor, Rachel Reeves, presented her debut budget to parliament, unveiling £40 billion in tax rises.
The UK budget plans to increase employers’ national insurance contributions and increase capital gains tax, while also making changes to inheritance tax and stamp duty. The non-domiciled status will also be abolished.
Value-added tax will be introduced on private school fees from January, while stamp duty on second homes has been increased to 5 per cent.
Dubai-based Devmark also said that British nationals were the top foreign buyers of its properties, followed by Indians and Russians, in the first half of 2024 amid continued demand.
“The primary motivations for investing in Dubai include the city's strategic location between Europe and Asia, tax free property policies, flexible payment plans, excellent rental yields and strong capital appreciation in terms of return on investment (ROI),” Sean McCauley, chief executive of Devmark, said.
Bullish forecast for property prices
Dubai property prices are projected to continue to rise amid higher demand from buyers.
“Prices will continue to grow in 2025 and well into 2026 as Dubai is much more affordable when compared to other major cities,” and offers a “much better service and a much better way of living than any of the global cities,” said Mr Sajwani.
Average property prices in Dubai soared to Dh1,473 per square foot as of October 2024. In markets like London, New York or Singapore, average prices far exceed Dh2,500 per square foot making Dubai a cheaper option to buy property, according to a recent report from Better Homes.
Lack of adequate supply in the market is also supporting the market.
“The time you launch to the handover, it's three to five years. So it takes time for the supply to come into the market. The market is currently undersupplied ,” Mr Sajwani said.
About 36,000 new homes, including villas and apartments, are expected to hit the market by the end of this year, according to a recent report from ValuStrat. New supply is expected to rise to 46,000 next year.
Mr Sajwani said Damac will continue to launch new projects to capitalise on rising demand. This year it launched about 12,000 new home units and plans to roll out similar number of new units next year.
Last month, it launched Damac Islands development at Dubailand and sold more than 3,000 units in less than 10 hours, with sales totalling Dh10 billion, according to the company.
Partnership with Trump Organisation
Damac, which built the Middle East’s only Trump-branded golf course in Dubai, is open to work with the Trump Organisation again on new projects.
“If the right opportunity present itself, we are more than happy to work with our all trusted partners, whether it is the Trump Organisation or any other partners,” Mr Sajwani said.
The Trump Organisation, owned by the president-elect Donald Trump, is teaming up with London listed Dar Global to develop new projects in Oman, Dubai and Saudi Arabia. It aims to further expand in the region with new projects, its executive vice president Eric Trump told The National last week.
Acquisition deals
Damac will also be looking at acquisition opportunities, “but they have to be at the right price, and the deal has to make sense”, Mr Sajwani, said.
“It could be in any sector. In 2020, we acquired Roberto Cavalli, which is a fashion brand. So we're sector agnostic as long as we think we can add value to the business, we can drive the business and we can grow the business.”
Mr Sajwani is also the chief executive and co-founder of Amali Properties, which launched its first project, Amali Island, worth Dh2 billion within The World Islands off the coast of Dubai earlier this year.
The project, consisting 24 villas, has been sold out except for one villa and is expected to be delivered in the first quarter of 2027, he said.
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'Ghostbusters: From Beyond'
Director: Jason Reitman
Starring: Paul Rudd, Carrie Coon, Finn Wolfhard, Mckenna Grace
Rating: 2/5
Queen
Nicki Minaj
(Young Money/Cash Money)
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
World Cricket League Division 2
In Windhoek, Namibia - Top two teams qualify for the World Cup Qualifier in Zimbabwe, which starts on March 4.
UAE fixtures
Thursday February 8, v Kenya; Friday February 9, v Canada; Sunday February 11, v Nepal; Monday February 12, v Oman; Wednesday February 14, v Namibia; Thursday February 15, final
What is the FNC?
The Federal National Council is one of five federal authorities established by the UAE constitution. It held its first session on December 2, 1972, a year to the day after Federation.
It has 40 members, eight of whom are women. The members represent the UAE population through each of the emirates. Abu Dhabi and Dubai have eight members each, Sharjah and Ras al Khaimah six, and Ajman, Fujairah and Umm Al Quwain have four.
They bring Emirati issues to the council for debate and put those concerns to ministers summoned for questioning.
The FNC’s main functions include passing, amending or rejecting federal draft laws, discussing international treaties and agreements, and offering recommendations on general subjects raised during sessions.
Federal draft laws must first pass through the FNC for recommendations when members can amend the laws to suit the needs of citizens. The draft laws are then forwarded to the Cabinet for consideration and approval.
Since 2006, half of the members have been elected by UAE citizens to serve four-year terms and the other half are appointed by the Ruler’s Courts of the seven emirates.
In the 2015 elections, 78 of the 252 candidates were women. Women also represented 48 per cent of all voters and 67 per cent of the voters were under the age of 40.
ORDER OF PLAY ON SHOW COURTS
Centre Court - 4pm (UAE)
Gael Monfils (15) v Kyle Edmund
Karolina Pliskova (3) v Magdalena Rybarikova
Dusan Lajovic v Roger Federer (3)
Court 1 - 4pm
Adam Pavlasek v Novak Djokovic (2)
Dominic Thiem (8) v Gilles Simon
Angelique Kerber (1) v Kirsten Flipkens
Court 2 - 2.30pm
Grigor Dimitrov (13) v Marcos Baghdatis
Agnieszka Radwanska (9) v Christina McHale
Milos Raonic (6) v Mikhail Youzhny
Tsvetana Pironkova v Caroline Wozniacki (5)
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Marathon results
Men:
1. Titus Ekiru(KEN) 2:06:13
2. Alphonce Simbu(TAN) 2:07:50
3. Reuben Kipyego(KEN) 2:08:25
4. Abel Kirui(KEN) 2:08:46
5. Felix Kemutai(KEN) 2:10:48
Women:
1. Judith Korir(KEN) 2:22:30
2. Eunice Chumba(BHR) 2:26:01
3. Immaculate Chemutai(UGA) 2:28:30
4. Abebech Bekele(ETH) 2:29:43
5. Aleksandra Morozova(RUS) 2:33:01
