As Rents And Values Rise, More Investors Start Investing Money In Dubai Real Estate Starting At Dh500.

As values increased in the first half of 2022, investors are finding that shared ownership of Dubai homes can be a good source of income. Shared ownership, or “fractional” ownership, of houses and offices in Dubai appears to have struck a chord with investors, even if gains in property values do not rise at the same rate in the coming months. Developers as well.

One in ten of the homes sold by Azizi Developments, according to a company representative, are currently subject to fractional title documents. Where up to four owners share the identical rights to the property at a time. In addition, if one investor decides to withdraw, they can sell their shares without affecting the rights of the other three in any way.

The developer’s Riviera project in MBR City is currently in the final stages of construction and handover, according to Tizian Raab, a representative for the company. “We have made several fractional individual property sales. This has been a notably popular choice for our commercial stores (which are part of community Azizi is building).”

Other developers are recognizing the potential of fractional ownership as well. However, they are leaving it up to investors to choose how they wish to participate. Dubai first started giving numerous documents on a single property last year. Since then, local auctions for the sale of a “share” in property have taken place.

There Is Also Demand

Since January 2021, Dubai’s real estate market has been booming, first due to end-user purchases. Then due to foreign investors choosing the city as their primary or secondary residential base. The latter explains why the luxury end of the real estate market has seen such high demand.

In the midst of all of this, investors have also gathered their resources to purchase indirect exposure to real estate. This method has been used to purchase apartments in Business Bay, Downtown, and Dubai Marina.

According to fractional ownership, only up to four buyers can receive titles to a property. However, a special purpose entity can be created to grant additional buyers rights to the same unit. Many residents and non-resident investors have expressed interest in that.

“Compared to alternative assets like cryptocurrencies, real estate investments have more upside potential at the moment. Many investors are switching over to buying either a full or a partial unit.

Market Timing

Siddiq Farid, co-founder, and CEO of the crowdsourcing site SmartCrowd, noted that timing the market is challenging for investors. “Walmart Buffet once said that what matters most in the market is how long you stay in it, not when you enter.

“We give investors access to the real estate asset class so they may ride the market wave patiently. Building a solid investment portfolio that can endure market conditions is made possible by investing in uncorrelated assets.

After selling an investment in a property near Dubai Marina, SmartCrowd claims it generated a total net return (rental income plus capital gains) of 39.25 percent over a period of 17 months and a return of 27.92 percent annually.