Dubai, gold and real estate

Dubai became world’s capital for Gold and Ultra Luxury Real Estate in a short span. It has $200 billion gold market and $600 billion real estate market. Dubai’s market share in real estate is 10% of the world and among the top in core value intensity.  The Emirate has wide unofficial trade in gold, pearls, merchandize and hawala. 30% of world gold flows are in Dubai. People buy jewellery in Dubai for purity, lower prices, best craftsmanship and blending. Prices in Dubai are 20% cheaper than in India and 30% than in US. Dubai is the Switzerland of the middle east. The country has no income tax although 5% VAT is applicable on several purchases.

Dubai has 40 lakhs population of which 8% are locals and 92% are non-locals. It annually receives 20 million tourists. For several tourists, traders, shoppers, and investors, Dubai is a favourite country. But for majority, Dubai is a big suspense and is apprehended as a strange, risky, and expensive country. Informatively, oil contributes less than 1% to GDP (Gross Domestic Product) of Dubai and majority income is from real estate, tourism, and trade. Dubai is among world’s top tourist places for its deserts, seashores, shopping malls, and skyscrapers.

Tourists come to Dubai from 200 plus countries. Dubai has highest number of skyscrapers and tallest structures in the world. The only 7-star hotel of the world Burz-Al-Arab is in Dubai.

Every year between 10 to 30 new projects come up making Dubai an evergreen tourist spot to visit every 3 years. The free trade zones, ease of transactions, global port connectivity, tax friendly treatment, government support, and officers’ courteous behavior make Dubai a preferred region for trade transactions.  However, real estate has higher values and facilitates the other two.

As resources were drying up on heavy infrastructure by year 2000, foreign freehold ownership was allowed from year 2002. This helped real estate prices rising by up to 200%. During global financial crisis, from year 2008 to 2012, real estate prices crashed up to 75%. However, in 2 years the prices recovered and by year 2024, real estate hit all-time highs in volumes and values. The growth continued in year 2025.  

Apartments include 1BHK of 700 sft plus, 2BHK of 1,000 sft plus, 3BHK of 1,500 sft plus, Townhouse of 3,000 sft plus, and Villas of 5,000 to 15,000 sft. The per sft prices vary from $200 in budget apartments to $5,000 in an ultraluxury villa project. Various developers sell properties with only 1% down payment and balance in instalments.

The annual rental yield ranges between 6% to 10% which is the highest in the world. The country has almost nil legal disputes on properties due to strict property regulations and very speedy judiciary process. Ease of transaction, loan availability up to 85% of total property value and house loans interest rates between 4% to 7% are the attractions.

About $200 billion worth real estate sales happened in year 2025. 155 nationalities own properties in Dubai. Indians constitute 25% of total foreign buyers. Other major buyers are from China, UK, Saudi Arabia, and Russia. India and other 4 together provide demand for 75% of real estate in Dubai. India is about 40 times Dubai in land size, and 400 times its population size.

Over the past 10 years, Dubai’s real estate recorded 4% CAGR with its cumulative real estate sales touching $1 trillion. Of Dubai’s 1.6 million houses including some under development, about 60,000 Indians own properties. 

Film, political, business, and sports persons consider owning a property in Dubai as a character of being a celebrity. Shah Rukh Khan, Salman Khan, Aishwarya Rai, Vivek Oberoi, Anil Kapoor, Malaika Aurora, Akshay Kumar, Shilpa Shetty, Sania Mirza, Virat Kohli, etc film stars have properties in Dubai. Purpose is for vacation and to earn higher returns with tax benefits.

Dubai adopted innovative and modern construction technologies including modular, prefab, 3D printing, BIM, AI, and robotic construction. Dubai is known for good quality and highspeed construction. For instance, Burj Khalifa, still the world’s tallest building saw 2 floors per day as per schedule.

Dubai was built at a locational advantage to benefit from trade flows, and tourism, and has succeeded in promoting the Emirate as best real estate market. It is conscious in not letting 2008-like market fall.

As of now market is slow but has not declined. On 7th March 2026, a property was purchased for more than $115 million (Rs. 1,050 crs) creating a new benchmark disregarding the ongoing geopolitical situations. The Emirate is best trying to position itself as investor-friendly, visa-friendly, tourist-friendly, trader-friendly, and a resident-friendly location.

 - Dr. Kishore Nuthalapati

The author is CFO of BEKEM Infra Projects Pvt Ltd