There has been a notable trend among wealthy Kenyans investing in foreign real estate markets, particularly in Dubai. But what makes Dubai such an attractive destination for Kenyan investors?
According to The Dubai Nomad, Dubai is home to approximately over 50,000 Kenyans, most of whom move there for work. Many Kenyans go to the UAE for better job opportunities, while others see it as a chance to expand their investments.
Data from the Dubai Land Department shows that Dubai’s sales value in August 2024 reached Dh37.3 billion (approximately Ksh 1.492 trillion), marking a 33% increase compared to August of the previous year. Additionally, the total number of sales saw a year-on-year growth of 36%, with 14,922 transactions recorded. This is only Dubai. Bear in mind that U.A.E has 6 other emirates.
In terms of transparency, the JLL and LaSalle’s Transparency Index ranks Abu Dhabi and Dubai as the 3rd and 4th biggest improvers respectively with Dubai holding position 28 globally. Kenya finds itself as a semi transparent market sitting at position 58 globally.
Below, we explore the key reasons driving this trend and why Dubai is a preferred real estate market for affluent Kenyans.
Table of Contents
1. Tax-Free Environment
Dubai’s tax-free status is one of its biggest draws for international investors. Unlike in Kenya, where real estate transactions often come with significant taxes, Dubai offers a tax-free income on property investments. There are no capital gains taxes or property taxes, allowing Kenyan investors to maximize their returns without the additional financial burden. This favorable tax structure enhances profitability, making Dubai an appealing option for wealth preservation and growth.
2. Lucrative Rental Yields
Dubai’s real estate market boasts some of the highest rental yields globally, with an average return of between 5% to 9% annually. For wealthy Kenyans, particularly those with properties in Nairobi’s high-end areas, the rental yields in Dubai are significantly more attractive. This is driven by a steady demand for luxury properties, thanks to the city’s position as a global business hub and a major tourism destination.
Kenyan investors are drawn to Dubai’s rental market, which is buoyed by expatriates and tourists looking for short-term and long-term housing. Compared to Kenya’s rental market, where yields can be affected by various economic and political factors, Dubai offers more stability and higher returns.
3. Political Stability and Investment Security
Political instability and concerns about market regulation in Kenya can make property investment within the country more risky. Dubai, on the other hand, provides a secure and politically stable environment for property investment. The city is governed by clear real estate laws and offers secure property ownership rights for foreign investors.
Dubai’s proactive government policies aimed at protecting investor interests have built confidence among Kenyan investors, offering an added layer of security that they may not always feel at home.
4. Booming Real Estate Market
Dubai’s real estate market has shown consistent growth over the past decade, despite occasional dips. The city’s continuous expansion, driven by large-scale infrastructure projects like the Expo 2020 site, Dubai South, and the city’s evolving skyline, contributes to rising property values. Wealthy Kenyans are attracted to the potential for capital appreciation, which is a compelling reason to invest in Dubai’s premium real estate developments.
Compared to Kenya, where real estate markets may be stagnating in certain areas, Dubai offers a thriving, dynamic market that promises future growth. The city’s strategy of diversifying its economy beyond oil into tourism, finance, and technology makes it an attractive location for long-term real estate investments.
READ MORE – Top 5 Real Estate Investments to Generate Passive Income
5. Ease of Foreign Ownership
One of the most significant advantages Dubai offers to foreign investors is the ease of property ownership. Unlike in Kenya, where foreigners face restrictions on land ownership, Dubai allows 100% freehold ownership of properties in designated areas for foreign nationals.
Wealthy Kenyans, therefore, find it easier to buy luxury apartments, villas, and commercial properties in Dubai without complex legal restrictions. This open-door policy has encouraged many Kenyans to invest in Dubai, confident that their investments are secure and straightforward.
READ MORE – Investing in Kenya Real Estate as a Foreigner: What You Need to Know
6. World-Class Lifestyle and Amenities
Beyond financial reasons, Dubai offers a luxurious lifestyle with world-class amenities, which appeals to many high-net-worth Kenyans. The city is home to iconic landmarks, luxury shopping malls, fine dining, and state-of-the-art infrastructure. This level of opulence, coupled with a cosmopolitan environment, attracts Kenyans seeking both lifestyle and investment opportunities.
Many wealthy Kenyans view property in Dubai not just as an investment but also as a lifestyle choice, with the potential to own holiday homes in one of the world’s most luxurious cities.
7. Access to UAE Residency
Ownership of one or more properties valued at a minimum of AED 2,000,000 (approximately Ksh 80 million) grants an individual a UAE residency visa known as the Golden Visa. This visa lasts 10 years and provides benefits such as unrestricted travel to the UAE, visas for family members, 100% ownership of businesses and more.
Conclusion
The growing trend of wealthy Kenyans investing in Dubai’s real estate market can be attributed to a combination of financial benefits, political stability, ease of ownership, and lifestyle appeal. Dubai’s tax-free environment, high rental yields, and potential for capital appreciation provide an excellent opportunity for Kenyans looking to grow their wealth while enjoying the advantages of one of the most luxurious cities in the world.
As Kenyan investors continue to seek global diversification, Dubai is likely to remain a top destination for property investment, offering a secure, profitable, and appealing alternative to the Kenyan market.
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