The rise and rise of Dubai
Dubai inexorable expansion has seen it become not only one of the most vibrant cities in the Middle East, but one of the fastest-growing cities in the world. Its population has risen 76 per cent in the decade leading to 2016, and it is expected that there will be another 15 per cent increase by 2026.
In the decade leading up to 2026, the number of Ultra High Net Worth Individuals (UHNWIs) in Dubai is also expected to rise by 60 per cent. It’s worth noting here that 90 per cent of the Dubai’s current population are expats.According to a new report by Knight Frank, the future of wealth creation here looks promising, with a forecasted GDP growth of 3.3 per cent in 2018. The Dubai International Financial Centre (DIFC) – which was ranked as one of the top 10 global financial centres last year – has embarked on an ambitious programme to be the base for 1,000 financial firms with a combined balance sheet of more than $400 billion by 2024.
Knight Frank adds that Dubai is already ranked as 21 out of 190 countries in the World Bank’s Ease of Doing Business Index, thanks to a strong infrastructure, independent judicial system and robust regulatory bodies that promote business. In the decade leading to 2016, there was a 220 per cent increase in the number of jobs created in the financial and business sectors in Dubai.The real estate industry, especially at the top-end of the market, has seen a steady long-term increase in value, as has cities like Hong Kong, London and New York, says Knight Frank. In the five years leading to Q3 2017, the price of prime real estate in Dubai has risen 14 per cent. However, Dubai is still relatively affordable compared to other major cities. For example, $1million will get you 138 square metres of prime residential property, compared to 22 square metres in Hong Kong, 28 square metres in London and 25 square metres in New York.
The tax structure is particularly attractive to the residents of Dubai. There is no income tax in the UAE, and no inheritance or gift tax either. Value-added Tax (VAT) at a rate of five per cent was introduced on January 1, 2018. Certain commercial transactions, like a component of those on residential real estate, are exempt from VAT.
The numbers add up. You don’t need us telling you that Dubai is in rude health.