london vs dubai

London vs. Dubai Real Estate: Unveiling the Ultimate Property Hub

Investing in real estate on a global scale can be complicated, especially with the numerous options the global market offers. Two cities may stand out globally, which are London and Dubai.

These cities represent two contrasting real estate scenes. Understanding their secrets is crucial for any investor. Azizi is here to make things easier, in this blog we will discuss the details of London’s and Dubai’s real estate markets, making it easier to make the right investment choice.

Neighbourhoods and Property Types

When it comes to the diversity of properties and neighbourhoods, London’s real estate market guarantees all is satisfied. From Georgian and Victorian homes in Chelsea and Kensington to sleek apartments in Canary Wharf, the city caters to all different requirements.

Does the Dubai real estate market level up to the expectations? Absolutely! Dubai is about luxury and modern architectural marvels. Studios, apartments, townhouses, and penthouses; you’ll find it all. From the pristine Palm Jumeirah to the home of the tallest building in the world, Downtown Dubai, the city’s neighbourhoods speak for themselves.

Market Trends

The UK market, in general, is a mature market that has seen steady growth with occasional fluctuations due to political events like Brexit.

The last UK House Price Index report showed that the prices of property in London increased by 6.3% in the 12 months to January 2023, dropping from 9.3% in the 12 months to December 2022.

Prices are expected to remain steady in London’s central areas, such as Kensington and Chelsea, while prices in areas far from central are likely to be hit by the increasing mortgage rates. This will majorly affect the appeal of London property investments.

What about the glamourous Emirate? The Dubai real estate market has emerged as a rapidly evolving market, transforming from a desert landscape to a global city in mere decades. According to a Realiste study, the off-plan market is witnessing significant growth, especially in prime neighbourhoods like Palm Jumeirah.

Prime property prices in Dubai are expected to increase by 50% by the end of 2023 compared to 2021, which means it will surpass the prices in major cities, including London. The spiralling prices are the result of the increase in sales, which amounted to about AED 265 billion in 2022, achieving about a 76% spike compared to 2021.

Despite this increase, the prices of Dubai’s luxury properties will remain more affordable on the global level.

Long story short, experts are expecting Dubai’s real estate market to outperform London in real estate investments in 2023.

Economic Indicators

London’s economy is mature, with a robust financial sector. What about Dubai’s economy? Well, it has witnessed substantial growth since its transition from oil dependence to a diversified and growing economy. Dubai’s real estate sector currently plays a vital role and offers lucrative opportunities for global investors.

Supply and Demand

According to the last quarterly London Housing Market report, demand for property has dropped drastically while the supply has increased. Subsequently, the real estate sale market will remain weak in the short term. The report also shows a drop in rental demands.

Dubai’s real estate market, on the other hand, is experiencing surging demands. The rocketing population has contributed significantly to this surge. The Dubai Statistics Center reported a population of 3,604,030 as of July 2023, which marks a rise of 88,766 individuals in the past 12 months.

The somehow tight-supplied market in Dubai is expected to expand significantly to meet this increasing demand.


 London and Dubai represent contrasting infrastructural tales. London, with its historic London Underground and rich architectural blend, faces challenges in balancing modern development with heritage preservation. Meanwhile, its green initiatives target a zero-carbon future.

Dubai, on the other hand, boasts a more recent, state-of-the-art infrastructure, exemplified by the Dubai Metro and iconic skyscrapers like the Burj Khalifa. Facing its own set of challenges, such as water conservation in a desert environment, Dubai’s ambitious plans include deriving most of its energy from clean sources by 2050.

Both cities present a mix of old and new, with forward-thinking sustainability goals at their core.

Foreign Property Investment Regulations and Laws

The UK’s real estate market is governed by a solid and transparent set of rules. Boasting robust property ownership rights and a relatively simple process for buying and selling, foreign investors face no challenges in acquiring property or transferring sales revenue or rental income.

Dubai also offers a positive regulatory landscape for investors. In 2002, the government introduced freehold property ownership in designated zones. The efforts to boost the attractiveness of The UAE as an investment destination continued by introducing the Golden Visa and 100% business ownership initiatives.


How about 0% zero-income tax rates? Sounds great, right? Dubai also edges out with no property taxes and no capital gains tax. London falls on the opposite side when it comes to taxes. Why? Investors in London are expected to pay 10% to 18% tax rates for capital gains.

Political Stability

London’s political environment is stable; although Brexit brought uncertainty, the country has rebounded. Dubai’s federation offers stability. In fact, it’s one of the major stable destinations to work and live in the Middle East.

Currency Stability

London uses the British pound, which is deemed one of the best-performing currencies in the world. What about Dubai? The UAE Dirham is pegged to the U.S. dollar and is considered one of the most stable currencies around the world.

Cost of Living

London is among the world’s most expensive cities; Dubai definitely wins when it comes to the cost of living. The numbers clearly show so! Here is a comparison of the cost of living in Dubai vs. London provided by Numbeo, one the world’s largest cost of living databases:

  • Consumer Prices in Dubai are 24.7% lower than in London (without rent)
  • Consumer Prices, including Rent in Dubai, are 26.7% lower than in London
  • Rent Prices in Dubai are 29.4% lower than in London
  • Restaurant Prices in Dubai are 30.9% lower than in London
  • Groceries Prices in Dubai are 22.0% lower than in London
  • Local Purchasing Power in Dubai is 41.6% higher than in London

Rental Yields

The average rental yield in London is 5%; depending on the area, some areas may offer a lower rental yield of 3%.

Dubai’s real estate market is globally known for its high rental yields. The rental yield in the city can mount to 9%, depending on the area and property type, which presents Dubai as an attractive destination for property investors.

Why does Dubai offer higher rental yields? Such attractive returns are attributed to many factors, such as government initiatives that encourage investment, modern amenities and infrastructure, and the luxury lifestyle that attracts tenants from around the world.

Capital Growth

Both cities offer potential for capital growth, but London’s mature market might mean slower growth compared to Dubai’s volatility. An let’s not forget about the taxes London imposes on capital gains.

Tourism and Tourism Growth

According to the latest numbers, London ranks third as the most visited city, while Dubai ranks fourth. However, experts are forecasting that the luxurious Emirate will outperform the UK capital by 2025.

What’s behind this leap in the UAE’s tourism sector? The country is relentlessly working towards developing its tourism and hospitality sector by introducing numerous developments and hosting global events like the Expo Dubai. The city is internationally renowned for its tourist attractions, lavish shopping malls, one-of-a-kind entertainment destinations, and high-end resorts and hotels.

Climate and Geography

London offers a colder climate compared to Dubai’s scorching weather. Yet, the foggy climate doesn’t play in favour of London. Will residents prefer waking up to a rainy, gloomy day or a sunny one with golden and blue views? It’s likely the latest.

So, what’s your call? We think Dubai’s real estate market is the winner in the Dubai vs. London debate.

Want to learn more about investing in Dubai’s real estate market? Visit Azizi’s blog for more information.

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