Can India's middle class invest where Dubai's billionaires buy homes?

India Today

a day ago

For a long time, Dubai looked like a rich person's dream, shiny buildings, luxury cars, no income tax, and homes that looked like something out of a movie.It felt like a place only for billionaires, Bollywood stars, and big business families. But things are changing now as more and more salaried Indians are asking the same question: Can I also buy a home in Dubai?advertisementRitu Kant Ojha, CEO of Proact Luxury Real Estate, said that the interest from Indian buyers has expanded beyond just high-net-worth individuals.'We're witnessing a strong inclination among Indian buyers for a diverse range of properties in Dubai. Apartments remain highly sought after, particularly those in well-connected areas with solid infrastructure,' he said.
Demand is also rising for villas and townhouses in gated communities, especially among families looking for space and lifestyle amenities.ENTRY COST: NOT CHEAP, BUT POSSIBLEFor most salaried Indians, the first concern is cost, and understandably so. While Dubai is often portrayed as a high-end real estate market, there are entry points that may suit higher-income middle-class buyers.Ojha explains that mid-range apartments in decent neighbourhoods often fall in the AED 1 million to AED 3 million range, or roughly Rs 1.5 crore to Rs 3 crore, depending on the location and developer.advertisementFor such properties, a buyer usually needs to put down around 20% as down payment, plus 4% for the Dubai Land Department's registration fee. That means an Indian buyer would need to have around Rs 35–50 lakh in liquid savings to enter the market.'This is not for everyone,' Ojha cautions, 'but for dual-income families or professionals with long-term savings and financial discipline, it is doable.'FINANCING OPTIONS ARE OPENING UPWhile paying the full amount upfront is rare, Dubai's property market does offer multiple financing avenues.Ojha says, 'Non-resident Indians can explore mortgage options from banks operating in the UAE. Typically, these require proof of income and a valid passport. The loan-to-value ratio for NRIs ranges between 50% and 80%, depending on the buyer's financial profile.'An increasingly popular option is to go for developer-backed payment plans. These allow buyers to make staggered payments linked to construction milestones, or even continue paying in instalments post-handover.This has made Dubai more accessible to salaried Indians who may not have a large lump sum ready, but can commit to monthly payments.However, Ojha warns that all payment plans should be studied carefully. "The terms can vary widely. Some look attractive on paper but have hidden conditions. A good advisor will break it down for you.'HIGHER RETURNS COMPARED TO TIER-2 INDIAN CITIESadvertisementWhile the upfront investment is certainly higher than, say, buying a flat in Lucknow or Jaipur, the returns in Dubai are significantly better, Ojha explains.'In Tier-2 cities in India, you typically earn 2% to 2.5% annual rental yield. In Dubai, even mid-range apartments fetch 7% to 10%, especially in expat-driven neighbourhoods. Capital appreciation is also strong—15% to 20% annually, and sometimes more depending on the area and market cycle,' he said.There is also no personal income tax in the UAE, so investors don't have to worry about rental income or capital gains tax eating into their returns.But buyers must go in with open eyes. Apart from the down payment, buyers are responsible for several additional costs—4% registration fee, 2% brokerage commission, utility setup fees, and ongoing service charges which cover maintenance and building amenities. These costs can vary based on location, property size and developer.Another factor is the exchange rate risk between the Indian Rupee and the UAE Dirham. Although the Dirham is pegged to the US dollar and stable, any weakening of the rupee can increase the overall cost of investment for Indian buyers.advertisementSHOULD YOU PICK DUBAI OVER TIER-2 INDIA?Ojha says that for a buyer purely focused on returns, Dubai has clear advantages.'Dubai has better infrastructure, a safer legal environment, and much better rental yields. The 2040 Urban Master Plan also promises long-term development and stability," he explained. That said, he does not recommend jumping in without preparation. 'This is an overseas investment, and with that comes complexity. Currency risk, legal compliance under RBI's remittance rules, and property management need to be understood.'For first-time Indian investors from the middle class, Ojha offers simple but important advice: 'Find a trusted, RERA-certified advisor. Don't get carried away by glossy marketing. Start with a research-driven approach.'He recommends visiting Dubai in person if possible, choosing investment-focused properties with strong rental history, and being clear about your goals, rental income, capital gains, or future residence.Ojha believes that for the right kind of salaried Indian, with savings, financial discipline, and a long-term view, Dubai is no longer out of reach.'Many of my clients start with one investment and come back for more,' he concluded. (Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)Must Watch