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by Jeff Hornberger
According to NAR’s last survey of foreign buyers, the United Arab Emirates (UAE) did not make the list of top 10 investors in U.S. real estate. So why does this country matter to NAR members looking to grow their global business? The UAE is home to an emirate or “city-state” called Dubai, a booming and modern metropolis that is quickly becoming a hub for global capital, especially real estate.
While between 6-8% of US residential real estate sales are to foreign buyers, nearly 85% of real estate transactions in Dubai are to foreign buyers, or non-UAE nationals, according to Mahmoud Hesham El Burai, Director General of the Dubai Land Department, NAR’s partner group in Dubai. Its international buyers hail in double digit numbers from countries such as the UK, Russia, and India, countries that do appear in the list of top ten buyers of US property.
Why do foreigners buy in Dubai?
It is a safe, clean, tax-friendly, and truly global city where many different nationalities can feel at home. Its housing stock is fairly new, with gleaming high-rises (including the world’s tallest building, Burj Khalifa), man-made islands that jut out into the Persian Gulf shaped like palm trees and a world map, land structures that have added over 1,000 miles of coastline to Dubai. Its real estate market is highly regulated and prices and appreciation are strong after a market crash similar to the U.S. Its currency is pegged to the U.S. Dollar. Dubai’s airport, one of the world’s busiest, puts it within eight hours flying time of two-thirds of the world’s population. Think of Dubai as positioned in the middle of a modern day “Silk Road” linking Asia, Europe and Africa. Its privileged location has become a safe haven of sorts, especially during the Arab Spring, with 80% of foreign buyers buying in cash.
So what does all of this mean for NAR members?
· Your foreign buyer may also be looking at Dubai as a place to invest
· By partnering with a Dubai real estate professional, you can share client lists and referrals
· Dubai can be a hub for you to attract buyers to your local market. For example, if targeting India or Russia seems daunting and complicated, you may want to tap into these communities in Dubai; chances are they bought in cash and may be looking to the U.S. as well to diversify their international real estate portfolio.
Best of all, the National Association of REALTORS® has a partner group in Dubai called the Dubai Real Estate Institute, a grouping of professionals who subscribe to a code of ethics compatible with NARs and meet strict criteria to practice real estate there. Within this group you will find fellow CIPSs, CRSs, ABRs, and International REALTOR® members all who understand the REALTOR® name and REALTOR® brand, and are eager to share their credentials and establish business connections. Consider Dubai as a target market to attract not only buyers from the Middle East but in other key markets as well.
Jeff Hornberger is NAR’s Director of Global Alliances and oversees its 80 partnerships in 60 countries around the globe. Jeff can be reached at jhornberger@realtors.org.