Why Are Canadians and Americans Investing in Dubai Real Estate?

1. The higher rental return, higher capital appreciation, and less risk compared to the US are helping Americans diversify their portfolio from the US to Dubai. Dubai is still a new baby market as compared to the US market, which is over 100 years old, and so, they are learning from the US’s mistakes and making sure that it does not follow in their footsteps. This is attracting the Americans and Canadians to diversify their portfolios and try a country that is much more inviting and expat-friendly. 

2. One major factor that drives people to move to Dubai is to make money. In Dubai’s current market, many people from countries, especially Canada and the US, want to come to Dubai strictly for investing to make money.

3. A big percentage of people are migrating to Dubai for their own and their families' safety and security. This is another major factor causing the influx of people into this industry. People want to migrate to Dubai for one thing, and at the moment, it is their top priority, which is living peacefully in a safe and secure environment with their loved ones.

4. Another reason urging and attracting the American and Canadian people specifically to shift to Dubai is the kind of lifestyle offered by the country. Dubai, as a city, is a mix of over 190 nationalities, incorporating diversity and heterogeneity in the lives of its people..

People, especially in the Middle Eastern counterparts, have this perception that America is flawless and perfect, but unfortunately, it is far from reality. The living conditions and the economic conditions that Americans are facing currently are quite shocking. San Diego, from being one of the most beautiful cities, attracting a large number of tourists, to having the highest population of homeless people who are living on the streets.

If we look at some of the recent statistics, in America, only 24% of people own their homes. Unfortunately, America is a mortgage-owned society and not a property-owner society because of the American banks and the government’s policies.

Unlike the US, in Dubai, it is the other way around. Probably 30%-40% of the properties are mortgaged, and the rest are cash paid, and even the ones that are mortgaged, a person needs to put down:

• If he is a resident, minimum 20%
• If he is a non-resident, a minimum of 40% 

Americans have that mentality that everything has to be financed, and have been adapting to this mortgage society, and therefore, never end up owning their houses. So, if you already own a property and want to sell it, it's better to go with the developers’ payment plan.

In Dubai, the majority of the property buyers go with the developers’ payment plan, so in three and a half years, they are paid off and don't owe a single penny to the banks. One of the crucial reasons for the success of the Dubai market is that its real estate market is not controlled or owned by the banks, unlike the US, where the entire real estate industry is owned by the banks. So, when people fail to reach their mortgages through foreclosures majority of the owners end up losing their homes.

What takes people to the point where they end up losing their properties?

The equity loans are a growing trend in the US real estate market. It has its pros, but the cons are much more dangerous, causing the people to lose ownership of their properties and leading to their seizure by banks, who are already looking for opportunities to do so. In Dubai, the banks do not give loans for equity homes. The only thing you need when you want to buy a property in Dubai is money.

Last year, America's GDP was saved due to the consumers. The consumers were spending so heavily that they were able to save their GDP, and their debt jumped from $350 billion to $1.1 trillion. This teaches a lot to Dubai’s economy and public that it is important to educate yourself on your finances, and not just go on a spending spree. 

When Americans came out of the COVID-19 lockdown, the government gave $1,000 to everyone in the household, but they started spending instead of paying their debts with that money. Some people started buying homes even though the interest rates were very high, and the ones who were locked under a low interest rate of 3% are the only ones who are safe in the current market. This is what happened to the American general public, which is why they are in so much debt, as they have no savings.

Earlier, choosing a location or community in Dubai was so easy to pick because there were a handful of developments, but since COVID-19, because of the amount of cash flow that some of the new developers have who have entered the Dubai market and with prime collaborations that they have been able to make with such big brand names, it has become very tough to choose top picks. 

• For 2 million dirhams

One of the top pick communities is Dubai South because this area is barely under the radar and helps investors to maximize and get in a less capital investment. Moreover, new investors such as the Americans and the Canadians want to test the waters, so they don't want to jump into buying the most luxurious or outstanding property. If we look at Emaar South, the community, which started with low expectations, is now doing incredibly well. Many people didn't believe in Dubai South until the news finally came out about the new expansion of the airport, and now suddenly everyone is all about Dubai South and Emaar South. So, this community is one of the top developments to invest in in Dubai.

• For 5 million dirhams

Expo City is one such area or community in Dubai that has huge potential, even though currently, Expo City is selling at twice the price per square foot than Emaar South is, but they have a very good reason for doing so. The infrastructure is the key reason why Expo City is selling at a high price. If we compare, Emaar South does not have the infrastructure anywhere close to what Expo City offers. This community has incredible wonders and amazing benefits for the people.

• For 10 million dirhams

Within this bracket, currently, it is better to test the waters and patiently wait for the upcoming communities. People should be more wise and invest in plots and build their villas compared to the prices in the market, which are a little bit exaggerated. Instead of buying a 5- or 6-bedroom mansion at a higher price, a person can simply buy the land and construct it themselves.

1. To educate the overseas people, specifically the Americans and the Canadians, that when people are telling them to get an EOI (Expression of Interest) before even the day of the launch, it is not a sales pitch because a lot of people, not just in America but those who are not living in Dubai, assume that it is a typical sales pitch. Some investors end up facing the harsh reality by waiting until the day of the launch, as the entire project gets sold during the EOI process. 

In today's time in Dubai, the date of launch means nothing, and it is just for the sake of coming on social media and saying that the developer has officially launched this project, just to legalize bookings on a pre-launch basis. Most of the EOI is refundable because the developer does not give all the details. So, as an investor, if you need to secure the unit and you are serious that you want a unit in a particular project, then put in an EOI. If you do not get the desired unit, you always have the option of pulling out and taking your money back.

2. Another major challenge is that deposits for the EOI in America, when one tries to run their credit card by over $1,000, there's a red flag immediately by the banks, so their credit card is blocked, especially when that fund is going to the Middle East. So, to not use those payment links for the EOI, the best thing that works for American investors is a bank wire. 

The biggest challenge for Americans is the banking system because when they get their loans from the bank, it's a very lengthy process. They go through a major credit check in America. Usually, Canadians don’t face this difficulty concerning the money transfer as they are more lenient than the US

The Americans and Canadians are extremely impressed by the fact that it is so easy to buy an off-plan property in Dubai compared to the US. To purchase a property in the US is one of the most complicated things because there are so many transitions and steps that one has to go through, especially when buying an off-plan property. For example, in California, buying off-plan property is different as compared to buying in Miami or New York. Miami and New York are very similar to Dubai when buying an off-plan project.

When an off-plan project is launched, one can put a deposit and continue paying their payment plans until the handover. The difference between the US and Dubai is that a person is not allowed to resell that unit until it's officially handed over. The overseas people are often impressed when they find that in Dubai, after we pay off, we can exit the property while it's still under construction as per the developer's payment plan. Every developer has a payment threshold, sometimes it's 30%, 40%, or 50%. Once that payment is made, we can easily resell the property.

A lot of Canadians also buy in Dubai for having a winter home because when the winters are there, it's quite harsh, and if they have slightly older parents, it gets very difficult to stay there. Canada has brought this whole new perspective of winter homes, and it is very true because the winters are extremely harsh, but at the same time, with the influx of Canadians, that is a much higher percentage than that of Americans. Canadian immigrants have a better mindset for migrating to different countries than Americans. 

There was a trend back in 2015 when a lot of people from the UAE, specifically Dubai or surrounding places, migrated to Canada in search of a better lifestyle, but now many of these people are regretting their decision and feel that Dubai life was much better. Well, people always assume the grass looks greener on the other side, so a lot of immigrants thought that Canada was the ideal place to be and live for the rest of their lives until they finally went over there and realized the harsh reality.

• Switzerland is indeed a paradise without a doubt, until you go out in the general public areas, where the restrooms are not decent and clean. When we compare them to Dubai, it offers restrooms of five-star quality.
• People living in Dubai always complain about traffic, but if they go to Italy, it is one of the busiest places when it comes to tourism. That level of tourism is not there in Dubai. But the country doesn't have the infrastructure to support the number of tourists that enter the country, as there are no public transportation facilities.

In Dubai, the government has the least interference in the day-to-day lives of its citizens as long as they are abiding by the rules and not breaking any laws. Dubai fosters a peaceful and well-protected life, and that is what many people love about Dubai. The city learns a lot from other countries’ mistakes and improves on its part so that its citizens don’t have to face such problems. One of the reasons that people are living in Dubai peacefully is that the city is strict. People have their freedom, and have respect for their law and each other. 

In America, just before COVID-19, the amount of road rage that we witnessed in that country is immeasurable. People are so frustrated with their day-to-day lives that they simply get into fights and conflicts. So, this could also be a reason for the Americans and the Canadians to move to Dubai in search of a better living environment where everyone respects the laws and follows them. 

Dubai, the beautiful wonder, has emerged as a vibrant option for buyers and investors all around the world who want a more comfortable and secure life for themselves and their families. Recently, people from all over the world, specifically the Americans and the Canadians, have been investing in this city to experience its high returns and capital appreciation.