The Dubai Allure
Zero tax, absolute paradise, great weather, entrepreneurs and all of the gloss that comes with it. Dubai is very much at the forefront of the industry.
So why is it that I think you shouldn’t invest in this video?
I want to break down everything you need to be really concerned about when you’re making an investment, especially in a location like Dubai.
About the Author
I’ve invested in property for about 12 years now and I’ve bought and sold over 2,000 properties in my time. I’ve reduced these 2,000 deals worth of knowledge into tools, tips, and techniques.
Now let’s jump into the five big reasons why I absolutely wouldn’t look at this if I were you.
Reason #1: No Supply Constraint
The UK Advantage
What I love about the UK — and I’ll use the UK as the comparison — is we’re a tiny little island. We’re only legally allowed to build on around 6% of it. We only actually build on about 3% of it.
The thing that we hate about the UK — how bloody slow it is to get something done — is exactly what makes it great from an investment point of view.
Why?
Because of this massive supply constraint. We’re an overpopulated little tiny island in the grand scheme of things.
Compare That to Dubai
What they are incredible at is what creates fear.
| Factor | UK | Dubai |
|---|---|---|
| Available land for building | Limited (~3% built on) | Desert expansion |
| Building speed | Slow (government planning) | Fast (entrepreneur-led) |
| Supply constraint | Severe | Almost none |
| Result for investors | Strong fundamentals | Oversupply risk |
💡 Key Insight: You’ve got such an entrepreneur at the head of this that they go: “Oh, you want to build that? Boom, let’s do it.” And they’re building and building and building.
There’s a time-lapse of Dubai over 20 years — it was this tiny little thing and then they just build and build and build.
The Problem
Literally, you know the term “don’t build your house on sand”? That’s literally what Dubai is doing. Building on sand — and building more and more and more.
The real problem:
| Issue | Impact |
|---|---|
| High-rise apartments | Another one built next door |
| The Palm | They designed and built it, now they’re doing another Palm, and then another one |
| New supply | Constantly entering the market |
💡 Key Insight: It’s very much a developer’s paradise. Print as many properties as you can, get a bunch of people on ridiculous commissions to sell them. Good on them. It’s just not a long-term game plan for me.
Reason #2: Long-Term Data
Historical Evidence
In the UK, we have a thousand years of evidence. Dubai is very new.
| Location | Historical Data |
|---|---|
| UK | 1,000+ years of property history |
| Dubai | Very new, limited track record |
💡 Key Insight: Past doesn’t guarantee the future, but it is a good indicator.
The Excitement Problem
The more excitement there is around something, the less I want to invest in it.
- I like boring
- I like data
- I like fundamentals
I don’t like looking at something and going, “In the last five years it’s gone up 20% a year.” I’m like, that’s incredible. It’s also not sustainable at that point.
Bitcoin Comparison
It’s kind of like Bitcoin:
| Asset | Data Available | Risk Level |
|---|---|---|
| Bitcoin | Limited history | High |
| Dubai property | Short history | High |
| UK property | 1,000+ years | Moderate |
💡 Key Insight: The problem is much like traders — when they get a good win, they think they’re good traders. But the reality is 99% of people lose money on those trades.
Reason #3: The Tax Haven Isn’t What It Seems
What draws people to Dubai isn’t quite what it seems.
The Tax Reality
| Tax Type | Dubai Rate | UK Equivalent |
|---|---|---|
| Corporation tax | 9% | Higher |
| Income tax | 0% | 20-45% |
| Global tax pressure | Growing | Always present |
💡 Key Insight: A lot of people go to Dubai for tax reasons. The tax reasons aren’t quite what they seem.
The Six-Month Limitation
You can only live there for six months a year (unless you can handle the summer):
| Season | Weather |
|---|---|
| 6 months | Absolute gorgeous weather |
| 3 months | Slightly uncomfortable |
| 3 months | You need to get out of there |
💡 Key Insight: Everything that makes Dubai great from a tax implication point of view isn’t as special anymore.
Reason #4: The Market Is Propped Up by Off-Plan Developments
Off-Plan vs. Secondary Market
| Market Type | Characteristics |
|---|---|
| Off-plan | Higher prices, developer-funded, government-backed, negotiated terms |
| Secondary | Can see 40% discounts, market-driven |
💡 Key Insight: The off-plan market will almost always stay at a higher level. Even now, the off-plan market hasn’t dropped because developers and government funding won’t allow it.
What They Actually Do
Instead of dropping prices, they:
- Negotiate terms
- Make it more appealing
- Offer rental yield guarantees
But the secondary market tells a different story. At the time of filming, there are some locations where you can get a 40% discount.
The Fluctuation Problem
This just doesn’t happen in other areas of the world. Think about all the crap that’s hit the UK right now — it’s just not the same market fluctuations because it’s underpinned by strong fundamentals.
| Market Characteristic | Dubai | UK |
|---|---|---|
| Price stability | Volatile | More stable |
| Discount opportunities | Can be 40% | Much less |
| Fundamentals | Less proven | Highly proven |
Reason #5: Who’s Buying Property?
Foreign Investment Dominance
For me, it’s not a lot of locals. The data shows it’s a lot of foreign investment.
| Investor Type | Dubai Market | UK Market |
|---|---|---|
| Locals | Minority | Majority |
| Foreign investors | Majority | Significant but not dominant |
The Transient Problem
Foreign investment relies on a booming rental market. The problem with a booming rental market is it’s very transient.
Historical Impacts:
| Event | Impact on Dubai Market |
|---|---|
| 2008 crisis | Significant drop |
| COVID-19 | Massive impact |
| Iran tensions | Market fluctuation |
💡 Key Insight: Hotel rates dropped or occupancy rates dropped by 80%. That has a massive impact. It just makes me nervous because it’s such a transient approach to investment.
The Fundamental Question
Are you investing in fundamentals (sound economics) or are you buying for the next 3-5 years and looking to time the market?
| Investment Approach | Example | Suitability |
|---|---|---|
| Fundamentals | UK property, US property | Long-term security |
| Trend/Excitement | Dubai property | Short-term opportunity |
Final Thoughts
I genuinely love Dubai. I think it’s amazing and I think there’s a lot to bring to it. But:
If you’re looking for strong historic fundamentals that you can rely upon across the next 30, 40, or 50 years — I don’t think you should be investing in Dubai right now.
I genuinely don’t. Otherwise, I would be putting my money there. I really would.
If You Still Want to Invest in Dubai
If you’re someone who wants to capture the opportunity and the trend, and you can make a lot of money over the next couple of years, Dubai genuinely might be worth exploring.
Just make sure you:
- ✅ Are working with a broker that has 5-10 years of success
- ✅ Go in with the lens that you know what to look for
- ✅ Understand the risks vs. rewards
If You Prefer Fundamentals
If you’ve decided to invest in the UK property market or other established markets, focus on:
- Strong historic data
- Supply constraints
- Local buyer demand
- Long-term fundamentals
Summary: 5 Reasons to Avoid Dubai Real Estate
| Reason | Key Issue |
|---|---|
| 1 | No supply constraint — they’re building constantly |
| 2 | Lack of long-term data — very new market |
| 3 | Tax haven isn’t what it seems — pressure from global taxes |
| 4 | Market propped up by off-plan — secondary market discounts of 40% |
| 5 | Transient investor base — foreign investors, not locals |
What do you think? Would you invest in Dubai or stick with more established markets? Let me know in the comments below!
Disclaimer: This article is for educational purposes only and does not constitute financial, investment, or legal advice. Always conduct your own research and consult with qualified professionals before making investment decisions. Past performance does not guarantee future results. Individual results may vary.