Today, we had the pleasure of speaking with Alexey Gorbachev, a certified broker, investment consultant, and developer. He specializes in the sale and renovation of apartments, and the construction of villas, and high-rise buildings in Dubai. During our conversation, we discussed investment opportunities and the most attractive projects in Dubai, and he shared tips on where and how to invest most effectively.
As a real estate investment advisor in Dubai, Alexey works for AX CAPITAL, a market-leading real estate agency with a turnover of over $3 billion. He has more than five years of experience as a developer, is a member of the brokerage association RERA, and has a personal investment portfolio exceeding 100 million dirhams.
Alexey, could you please tell us how you started your career in real estate investment and why you chose to invest in the Emirates?
My entry into the real estate investment field began when the owner of the apartment I was renting decided to sell it. Inviting brokers to view the property would have disrupted my personal life, so I decided to try selling it myself. I managed to sell it in just three weeks, which was a speedy process.
From then on, I continued to buy and sell apartments for myself, my acquaintances, and my clients. It eventually led me to invest in real estate and construction and create my own investment fund.
Choosing a destination in the United Arab Emirates was an obvious decision for me. Dubai is a rapidly developing city that offers everything one needs for a comfortable and safe life. It boasts of the sea, perfect beaches, high levels of prosperity, and opportunities to network with successful people, making it a city of the future. Its ideal taxation system, which imposes 0% income taxes, creates a sense of economic security and stability. Dubai is committed to improving both the business environment and the quality of life for its residents. With over 15 million tourists visiting Dubai last year, making it the top destination in the world, the city has become an even more appealing location for real estate investment.
Can you provide information about your company, AX CAPITAL?
AX Capital was founded in Dubai in 2018 with the vision of establishing a new type of real estate agency that is innovative, technologically advanced, and ethical. We are the flagship division of AX Holding Group, whose subsidiaries provide mutual support to one another. AX Holding is a reputable name in the UAE real estate market, catering to the diverse real estate requirements of both professional and private investors.
AX Capital is an agency that offers over 100 carefully selected projects from more than 30 leading developers, some of which are exclusive. Our unique development, AX MAP, provides investors with a comprehensive view of the property, including the apartment, its surroundings, and the location of the residential complex in relation to the city. This tool offers a detailed overview of the property, showcasing its features and amenities, as well as the views from the windows. We have four areas of focus:
AX MANAGEMENT provides full-service property management, including long-term rentals with high-income potential.
AX CORPORATE provides advice and legal support for visa-related matters and business registration in the UAE.
AX DESIGN is our design firm and custom cabinet furniture company based in Dubai.
AX HOLIDAYS helps with short-term holiday home rentals and serviced apartments for both vacations and business trips.
What factors make Dubai an attractive location for real estate investment?
- The first factor is the year-round summer weather, which attracts numerous tourists and vacationers. Currently, there are 3.5 million permanent residents and a substantial number of tourists. Thanks to this, Dubai hosts world conferences and events that are also attractive to businesses.
- The second factor is the high demand for real estate among individuals involved in business. For living and investment purposes.
- The third factor is that Dubai’s economy is not solely dependent on oil, but rather on tourism and logistics, which offer a high return on investment.
- The fourth factor is the absence of taxes on profits, which is also appealing to investors.
- The fifth factor is that Dubai remains neutral and uninvolved in world conflicts, which is beneficial for businesses and allows investors to make long-term investment plans for the next 10–20 years.
- All of these factors combine to make Dubai a very attractive place to invest in real estate.
What are the advantages of investing in real estate in Dubai?
Aside from what has already been mentioned, there are several other advantages. Firstly, non-residents can purchase real estate in Dubai. Secondly, buyers have the option to purchase in interest-free installments from the developer. If the installment plan begins after receiving the keys, the cost of the property can be paid gradually, without the need for a mortgage or loan. Thirdly, property owners can obtain an investor visa by purchasing an apartment for as little as pf-word suggestion05,000. This visa is valid for two years and applies to the entire family. It allows visa holders to reside in the country, access insurance, attend school, open a bank account, and more. A second type of visa, known as the golden visa, can be obtained by purchasing real estate worth more than $550,000, which grants the holder the right to stay in the country for ten years. Additionally, property owners can resell their property without incurring taxes and rent it out to generate additional income. Properties in the Emirates are usually sold with completed repair work and a designated parking space. This reliefs investors of the burden of repairs and allows them to move in or rent out the property immediately, enabling them to start earning income right away.
What kind of property price growth can be expected in Dubai in the near future?
According to global analysts, real estate prices in Dubai are currently experiencing an annual growth rate of 10-15%. From 2014 to 2020, the real estate market underwent a correction and a decline in prices due to an oversupply of construction, which was intended to accommodate the EXPO-2020 international exhibition. However, the event attracted around 20 million visitors, which triggered a new surge in demand for real estate in Dubai. Therefore, real estate prices are expected to continue rising over the next 3-5 years.
It is interesting that property prices are largely dependent on the choice of investment projects. For example, real estate prices in coastal areas tend to be higher due to their limited availability and high demand. Those who desire to reside near the ocean are typically willing to pay a premium. To address this issue, various initiatives such as land reclamation and urban expansion have been implemented.
What are the requirements and restrictions for foreign investors who wish to invest in real estate in Dubai?
There are no restrictions in Dubai for foreign investors who wish to invest in real estate. You should understand that anyone can invest in any country in the world, including Dubai. The advantages of investing in this market are that they do not scrutinize the source of funds, allowing for cash payments. Buying property can be a complicated and demanding process in some countries, such as Europe. This can make sales in other countries more attractive and easier to navigate. You must navigate through numerous bureaucratic procedures and provide evidence of the legal origin of your funds. Everything is simple and fast here. That is why people from different countries, including Europe, prefer to invest in real estate here. Investors and buyers from 150 countries around the world are present. To invest in Dubai, you do not need to go through a lot of formalities. Everything can be done online.
What new real estate projects have recently emerged in Dubai?
There are many new projects that differ from previous ones in that they are more branded and have significantly improved internal infrastructure. It is due to the trend among large developers and brands to form collaborations, resulting in the construction of branded buildings that are designed by renowned architects and designers.
One of the notable features of these buildings is their extensive infrastructure, which includes common areas like a swimming pool and gym, as well as various recreational areas, saunas, spas, co-working spaces, and tennis and basketball courts. And even oxygenated tunnels and spaces for yoga and meditation.
In addition, residents of such buildings have the opportunity to invite guests to parties and organize dinners at home, ordering food from their personal chef. Due to the diverse infrastructure and potential for social interaction, new real estate projects are highly sought after and often sell out quickly.
Do you see promising long-term prospects for the real estate market in Dubai?
Of course, I see a long-term perspective in Dubai. They plan to double the population there, from 3.5 million to 6-7 million, which is expected to drive economic and business growth. It also means improved infrastructure, parks, school zones, and other amenities. Population growth will also result in a surge in the demand for housing, leading to an increase in real estate prices. In addition, Dubai is a safe country, and many people choose to live or visit there because of this. New laws that promote the growth of Russian-speaking communities will also enhance the quality of life in this country.
Let’s examine the statistics that demonstrate Dubai’s potential for high growth. UAE’s Economy Minister, Abdullah Bin Touk Al Marri, has announced that the country’s economy is expected to grow by 6.5% in 2022 and 7% in 2023. In 2022, approximately 27,000 apartments and 4,000 villas were completed and made available for occupancy in Dubai. Expect 40,000 apartments and 7,000 villas to be built by 2023. According to analysts, real estate prices in Dubai are expected to increase by 8% in the near future and by 30% by 2026.
Despite the abundance of luxury real estate, the demand from super-rich buyers remains unmet. However, the United Arab Emirates (UAE) has climbed four positions on the Kearney Investment Confidence Index and now ranks 15th globally in terms of investment attractiveness.
What type of real estate in Dubai is expected to be the most profitable in the near future, and what are the reasons behind it?
To maximize the return on investment in real estate, I recommend buying two or three-bedroom apartments in good locations and new buildings. Many individuals choose to relocate to Dubai for permanent residency, resulting in a higher demand for apartments compared to studios and one-bedroom units. Investing in villas can be a wise decision as their construction is limited, and their demand has surged after the COVID-19 pandemic. However, it is important to keep in mind that villas make up only 1-2% of the total market. It is recommended to pay attention to apartments. Investing in land can be a profitable option as the availability of land is decreasing. It is important to remember that when choosing a real estate investment, you need to consider both the project and the location.
How do you choose a real estate broker that meets your needs? And why should someone choose you?
I advise you to ask the broker a few questions before you begin:
1) How long have you been working in the real estate industry?
In which projects would you consider purchasing real estate for yourself?
3) Do you invest in real estate personally?
4) Can you provide examples of successful deals or cases you have worked on?
As for me, I have been in the real estate industry for quite some time. In my portfolio, I have investment projects with detailed financial projections, not just attractive images from the developer. I specialize in analytics and consistently strive to forecast market trends. If we are discussing clients who are purchasing real estate for personal use, it is crucial to listen to their needs and preferences and present them with options that are a perfect match. Many brokers work with clients for weeks to help them determine their preferences.
I first present all the projects in my office, and then we collectively choose 2–3 favorites before proceeding to view them in person. As a rule, by the second meeting, my clients have typically signed a deposit agreement and provided a deposit. Additionally, I invest in real estate in Dubai. This is important because many real estate sellers do not believe in the market and instead try to sell everything in a row or prioritize properties where the developer pays a higher commission.
I believe that it is better to work with clients in the long term and earn less than to simply tell them “fairy tales”. In addition to my primary area of expertise, I am also involved in related fields such as repairs, construction, and paperwork assistance, including visas and bank accounts.
And of course, choose a broker that you mutually like.