Dubai is the world’s fourth busiest luxury real estate market, with 219 homes priced at more than $10m in 2022, just behind London, New York, and Los Angeles, according to Knight Frank. And it’s easy to see why. Dubai offers a range of benefits for those looking to invest in luxury property, from its fabulous year-round weather to its reputation as a safe haven for businesses and investors.
We love Dubai! So much so that Large Mortgage Loans has recently set up a specialist mortgages advice hub in Dubai and we are stoked to be there! We have organised specialist finance for many clients buying luxury property in Dubai so we already have great relationships with a number of local Dubai lenders as well as international banks. And there’s nothing we don’t know about organising an international or foreign currency mortgage!
Here are some reasons why buying luxury property in Dubai is a smart investment:
- Perfect weather and an outdoor, luxury lifestyle: Dubai boasts year-round sunshine and an outdoor lifestyle to match, making it a paradise for those who love the sun, sea, and sand. From white sand beaches to turquoise seas, blue skies, high-end restaurants, state of the art entertainment venues and luxury air-conditioned shopping malls the size of several football pitches, Dubai has something for everyone.
- Ideal location: Dubai is situated at the crossroads of Asia, Europe, and Africa, making it a hub for business and trade. As a result, the city is a popular destination for investors and businesses looking to establish a presence in the Middle East.
- Competitive property prices: According to Knight Frank, property prices in Dubai are comparatively under-valued to London and other property hotspots. For $1m, you can secure a prime Dubai property three times the size of an equivalent property in London and five times a similarly priced property in Hong Kong. You will also have your pick of apartments, penthouses and villas most with exclusive access to gardens, swimming pools, gyms and concierge services.
- A safe haven for investors: Dubai’s reputation as a safe haven for investors is one of its biggest draws. Strict Covid restrictions enforced by the Dubai leadership, combined with a mass rollout of the Covid vaccine, meant that the emirate bounced back to normality quickly, inviting investors and companies to be part of Dubai’s growth plans by inviting them to open offices there and easing visa rules to accommodate this.
- Tax benefits: No capital gains or income tax
Foreign Currency Mortgages / International Mortgages
If you’re tempted to follow your dreams and become a Dubai property owner but you need a mortgage to cover the purchase, then you could consider a foreign currency or international mortgage (usually there is some crossover between the two). Foreign currency mortgages allow investors to take out a mortgage in a currency that is practical for them when purchasing property abroad.
Here are some key points to keep in mind when considering this type of financing:
- Tailored solutions: We provide bespoke solutions tailored to your individual needs. For example, if you have a multi-currency income, we may seek to provide you with a multi-currency solution.
- Available to foreign buyers: Foreign buyers, as well as those from the UK, can use foreign currency mortgages to buy property in Dubai.
- Monthly instalments: The mortgage will be paid in monthly instalments in £ sterling and then converted into the foreign currency at the foreign exchange rate when each instalment is due.
- Lower interest rates: You may be able to benefit from a lower interest rate on a foreign currency mortgage which can save borrowers a considerable amount of money over the course of the loan.
- Currency fluctuations: If it is beneficial or practical, investors can change the currency in which the mortgage is held mid-term to take advantage of fluctuations in currency values and secure a lower interest rate.
- Risks involved: It’s important to note that foreign currency mortgages come with risks and are not suitable for everyone. Buyers should be aware of the implications of a permanent increase in their loan, resulting in higher interest rate payments, and should only consider these loans if they can afford the financial implications.
- Local bank, local knowledge: An international mortgage, or foreign currency mortgage, can be arranged by a local bank and certainly has its advantages. Local banks will be familiar with the local property market, customs and buying processes which can be very helpful. At Large Mortgage Loans, our advisers speak a number of languages, including Arabic, making communication with Dubai lenders plain sailing for our clients.
If you’re thinking of investing in luxury property in Dubai, it’s important to work with a mortgage broker who specialises in this market. We would love to help!
Get in touch with us today to discuss your options and start your journey to becoming a Dubai property owner.
To read more about Dubai, click on Dubai Mortgages | Large Mortgage Loans.
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