Where should your next property investment be: Dubai or Mumbai? As two of Asia’s iconic cities, both offer tempting opportunities for investors. But which promises the best return on investment? In this blog, Azizi dives into the details of the real estate market in Dubai and Mumbai, discussing many aspects property investors must consider before making their final decision.
Famous neighbourhoods for property investment in Mumbai include Kanjurmarg West, Vikhroli West, Marol, Juhu, Kurla West, Bandra, Thane, and Airoli. The property types range from apartments to bungalows and villas.
Does Dubai offer a variety as well? Whatever you’re looking for, you’ll find it in Dubai. The real estate market in Dubai offers studios, apartments, townhouses, and penthouses, meeting the expectations of both luxury and affordable home seekers. Dubai’s prime property investment addresses include Palm Jumeirah, Downtown Dubai, MBR City, Dubai Sports City, and Al Furjan.
The Mumbai real estate market is expected to grow, with numbers showing a 36% increase in property sales in 2023 compared to last year.
According to the Financial Capital of India, the prices of prime residential properties in Mumbai have increased by 5.2% year-on-year in the second quarter of 2023.
What about Dubai? According to the Prime Global Cities Index Q2 2023 report, the prices of prime property in Dubai have soared by about 50% in 2023 compared to 2021, surpassing major cities like Tokyo, Manila, and Mumbai.
In the affordable housing market, Dubai outranks Mumbai. According to the Times of India, Dubai properties are 30%-50% cheaper than Mumbai. High-net-worth Indian investors, professionals, and individuals are currently showing higher interest in the real estate market in Dubai.
There are soaring demands on property in Mumbai, especially for bigger homes. Mumbai’s western suburbs experienced an increase in Q2 in 2023. The supply is increasing to follow up with the soaring demand.
What about the real estate market in Dubai? The Middle Eastern city is showing more demand on property. Why? One of the main reasons behind the increasing demand in Dubai is the city’s population surge. Dubai Statistics Center report showed a population of 3,604,030 as of July 2023, meaning an increase of 88,766 individuals in the past 12 months.
To meet such demands, the real estate market in Dubai is expected to expand its supply.
It’s no surprise that Dubai boasts world-class infrastructure, from roads to airports. The city is also aiming for futuristic projects, such as the Hyperloop and the Electric Abra. Such projects position Dubai as one of the most desirable places to live. The glamorous city is also walking steadily toward sustainable developments, such as the Sustainable City. New buildings are also required to offer solar water heaters.
India, in general, may face some challenges when it comes to infrastructure, but it’s working on enhancing its services through various projects. Mumbai, with its local train network, is working on enhancing its metro lines and modernising its infrastructure to offer a more convenient lifestyle to its citizens. Upcoming infrastructure projects include metro lines 2A and 7 and the Santacruz-Chembur link road extension.
Buying property as a foreigner in Mumbai may be far more complicated than in Dubai. There are different rules in India that apply to persons of Indian origins (PIO), foreigners of non-Indian origins living outside the country, and foreigners of non-Indian origins residing in the country.
A PIO can buy any immovable property without permission except for agricultural lands, farm hoses, and plantation property.
Foreigners of non-Indian origins are not permitted to own immovable property unless they inherit such properties from an individual who resided in India with the permission of the Reserve Bank of India (RBI), and the inherited property cannot be transferred without the approval of RBI. Exceptions are made for properties used for business purposes, foreign diplomats, and foreign spouses.
Foreigners of non-Indian origins residing in India can own property by obtaining approval from the concerned authorities, such as the state government. Individuals from Pakistan, China, Iran, Sri Lanka, Bangladesh, Nepal, and Bhutan must obtain approval from RBI.
Can you buy property in Dubai? Yes! The process is easier than you think. Since 2002, foreigners have been allowed to buy residential and commercial property in freehold areas, which includes Palm Jumeirah, Dubai Sports City, Downtown Dubai, Jumeirah Beach Residence, and Dubai Marina.
In addition to freehold areas, The UAE introduced the Golden Visa and 100% business ownership initiatives to encourage investment in the real estate market in Dubai and other emirates.
In order to provide amenities and infrastructural facilities, Mumbai imposes taxes on property. The Municipal Corporation of Greater Mumbai (MCGM) calculates the tax rate based on the market value of the property.
On the contrary, the real estate market Dubai is backed by a favourable tax-free environment, with zero property and capital gains tax.
The Indian rupee is one of the most stable currencies in the region. Experts are expecting it to grow stronger in the far future. What about currency in Dubai? Pegged to the US dollar, The UAE Dirham is one of the most stable currencies around the world.
Although Mumbai is considered one of the most expensive cities in India, it triumphs over Dubai when it comes to the cost of living. According to Numbeo, the cost of living in Dubai and Mumbai compares as follows:
- Consumer Prices in Mumbai are 59.6% lower than in Dubai (without rent)
- Consumer Prices, including Rent in Mumbai, are 60.4% lower than in Dubai
- Rent Prices in Mumbai are 61.4% lower than in Dubai
- Restaurant Prices in Mumbai are 66.1% lower than in Dubai
- Groceries Prices in Mumbai are 47.4% lower than in Dubai
- Local Purchasing Power in Mumbai is 58.0% lower than in Dubai
But one thing to consider here is that the quality of life and the average salaries differ drastically between the two cities. According to statistics, the average monthly salary in Dubai is about $4,570, while in Mumbai, it’s about 552 USD, which can affect an individual’s lifestyle significantly. Again, Mumbai is one of the most expensive cities in India, which means the average may barely cover the essentials.
Mumbai offers one of the lowest rental yields on the international level, with an average of 2%-3.23% for residential properties and about 7% for commercial properties.
What about Dubai? Well, Dubai is a whole different story. The luxurious city’s real estate market is renowned for its high rental yields. Property investors are promised lucrative opportunities, with about 9% rental yield, depending on the area and property type.
These returns are reasonably expected due to the efforts the government has exerted to paint the city as a safe and attractive destination for investment, working, and living. Such measures include quality of life, advanced infrastructure, and high-end amenities.
With no income or capital gains taxes, Dubai presents itself as a more attractive destination for capital growth compared to Mumbai which imposes a 20% tax rate on long term capital gains.
Does Dubai seem a more attractive property investment destination now? We have no doubt. Now, you are ready to take the next step: finding a suitable property for your requirements. Azizi can help you with that as well.
We pride ourselves on offering some of the best properties in the real estate market in Dubai. From studios and apartments to villas and townhouses in the city’s most affluent neighbourhoods, you’ll find what you’re looking for with Azizi developments.