UAE investments by Saudi Nationals

The UAE property market really kicked off 15 years ago, in 2002, when the government passed a law allowing foreign nationals to purchase property in Dubai’s newly created freehold zones.

Young couple having bought a house — The creation of these freehold zones finally allowed non-UAE nationals to invest in the country they call home.

The next three years saw the other six emirates follow suit, with Abu Dhabi being last to launch their Investment Areas in 2005. Predictably, this saw an influx of foreign property investment into the UAE, with non-UAE nationals purchasing commercial buildings and residential units alike.

Saudi Arabia and the UAE

Saudi Arabian search profile on Bayut.com by gender, type of search and properties searched for, eg: flats vs villas/townhouses/plots and so on.

The UAE and Saudi Arabia have long enjoyed a special relationship in several matters, with real estate being no exception. This is evidenced by the fact that of the 50 exhibitors at Cityscape Jeddah 2016, 20 were from the UAE. Furthermore, visitors from Saudi Arabia made up the largest foreign visitor base at both Cityscape Abu Dhabi 2017 and Cityscape Dubai 2017. With AED 7B pouring into the UAE as investments by Saudi Nationals, KSA emerged as the 2nd largest investor of the UAE real estate after India with AED 15.6B in 2017 according to the Dubai Land Department (DLD).

Investments by Saudi Nationals

Dubai was the top choice for investments by Saudi Nationals. According to the Bayut Data team, out of around a million page views that originated in Saudi Arabia, 68% were for properties located in Dubai, followed by Ajman, Abu Dhabi and Sharjah, in that order. One of the reasons behind this is the sheer familiarity of Dubai to Saudis – it is a city that most investors know well, in a country that shares similar values as Saudi Arabia. The UAE is also known for its investor-friendly policies, quality of developments and relatively stable market.

The interest is also reflected in figures announced by the DLD in their bi-annual report on GCC real estate transactions in Dubai. As of June 2017, Saudi nationals invested AED 4B in the Dubai real estate market compared to the previous six months, over 1936 transactions, second only to Emiratis.

Search Trends for investments by saudi nationals

downtown dubai — Downtown Dubai was the top most searched for neighbourhood in Dubai, by users based in Saudi Arabia, from the few searches that specified an area.

Despite the country’s popularity amongst Saudi investors, this seems to be based on the reputation of the entire UAE as a whole. According to the Bayut Data team, searches from Saudi tend to be for specific cities rather than individual areas (75% of Dubai-related searches are for ‘Dubai’ while 90% of searches for other emirates do not mention a neighbourhood or community, but search for the emirate itself). This is also reflected in the fact that around 70% of searches don’t specify the number of bedrooms either, suggesting that properties are seen purely for investment purposes and ROI instead of perhaps a holiday home or for personal use.

An Investor’s Point of View

To better understand the investment climate, we spoke to Zeyad Saleh Abed AlRazaq Al Swayyegh of Al Swayyegh Commercial Services in Dammam, Saudi Arabia. As a Saudi national, he was motivated to invest specifically in Dubai property due to the uniqueness and beauty of the various projects, the abundance of several tourist attractions and of course, the fact that it’s so close to his home country.

Having invested for the first time in 2003, in a property on Palm Jumeirah, Al Swayyegh respects all the developers in the UAE but admits that in his eyes, the most trusted ones are Emaar and Nakheel. This is in part due to their one-of-a-kind developments as well as their commitment to delivering projects on the promised date.

palm jumeirah in dubai — Palm Jumeirah marks the first of Al Swayyegh’s investments in Dubai, back in 2003.

While Al Swayyegh owns a real estate in Dubai for personal use, during holidays, he believes hotels make excellent investments in Dubai. High demand throughout the year coupled with price stability and the ease of leasing them makes hotel investment a winner in his books. If you’re looking into making an investment in the UAE, take heed from the thinking and advice of successful businessmen like Al Swayyegh and buy a hotel apartment in Dubai.

Regarding what the UAE can do to further attract Saudi investors, he feels that developers are already doing a fantastic job. He cites the continuous presence in real estate exhibitions as well as in all forms of media, promotions and flexible payment options as being some of the tactics used by developers to entice investors.

Conclusion

construction in saudi arabia — Saudi Arabia is actively working on its own real estate market.

While Saudi Arabia is working towards boosting investment in its own real estate, thanks to several new projects and efforts to boost homeownership rates, it’s clear that Dubai and UAE property remain a viable option for investors from the Kingdom.

The success that Dubai (and in turn the larger UAE) has been experiencing is undoubtedly thanks to the city’s proximity to Saudi Arabia and its overall real estate reputation – evidenced not only by reports put out by the Dubai Land Department (the city recorded AED 204B worth of real estate transactions in the first nine months of 2017) but by the sheer quality and pace of completion of projects and of course, reports by Bayut.com.

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