DUBAI VS : LONDON

Dubai vs. London

In the dynamic landscape of global investment, London stands as a venerable beacon of stability, while Dubai emerges as a vibrant hub of opportunity. As investors navigate the complexities of international markets, the choice between these two economic powerhouses becomes increasingly significant. This brief and digestible article delves into the comparative analysis of London and Dubai, exploring the key factors that shape investment decisions in these diverse yet interconnected cities.

Quality of life?

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Waking up to the sun every day and the natural vitamin C are too benefits that for some are enough to make the move, they must do so knowing that from June until September it can be an extremely difficult place to call home. Accessibility is something that can’t be overlooked in Dubai and everything can be ordered to your doorstep even fuel thanks to CAFU! Access to cheaper services compared to the UK is one of the many added benefits you didn’t know you needed. Whether it’s Padel after work or drinks by the pool Dubai comes out on top in this one. It must also be said that most residential developments come complete with a range of amenities often including a pool and a fitness facility as standard. As the market becomes more lucrative and more developers enter the market they competition to attract buyers is seeking more and more offered at each launch. Now a Gym and a pool is expected, padel courts and podcast studios to name a few of them

Tax?

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The U.K. has a basic rate of 20% (up to ￡37,700), a higher rate of 40% up until ￡125,140, and an additional rate of 45% for anything above that. The UAE, by contrast, has 0 percent, meaning all your money is yours, but that's hardly the biggest secret in the world at this stage. The UAE does, however, have a corporate tax rate of 9%, but when compared with the UK at 25%, it seems relatively small given the other added benefits. When Jeremy Hunt delivered his budget last week and announced that the non-domicile law would be changing, there was little talk in Dubai about just how big of a deal that is. Up until now, successive governments have concluded that the non domicile regime is valuable for the UK because it encourages wealth-creators to locate in the UK. That was until Hunt decided to Reduce the rate at which one can be taxed on their foreign income from 15 years to just 4 years. This is big for the UK economy in the sense that, because of this rule, many high-net-worth individuals have decided to call the UK home they may now however decide to change that and seek the warmer shores of a place like Dubai, it has already led to a spike in several private equity firms exploring the region in the last year or so. The average after-tax salary is enough to cover living expenses for 1.8 months in Dubai compared to 1.2 months in London.

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Price per square foot

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While it can change from area to area, I've decided to choose Downtown Dubai's newest residence, Il Primo, a collection of full-floor and half-floor penthouses looking over on the Burj Khalifa and surrounding area, as Downtown Dubai's closest comparison to London's Mayfair area. In Mayfair, the average price per square foot is the most expensive in the world and sits at a massive ￡3869 per square foot, with an average home cost of 18.4 million (86 million AED).? Il Primo, however, despite its lack of maturation, is relatively cheap by these standards, with the median price per square foot sitting at 4640 AED with an average median price of 24.5M. Now I know that historically, the UAE market has been historically volatile and based more on speculation and easy credit; however, that has slowly changed, and by 2023, 80% of transactions will be made in cash. This removes speculation in that sense of the word, but it does still mean investors are betting big on Dubai, and with reason. The economy has gone from strength to strength even during the COVID years, when the UK is only just recovering from a post-COVID recession. Not to mention a stable government during a time when the UK had three prime ministers! House prices in the market haven't moved for a year, according to a Bloomberg article from a fortnight ago, and recently, Bobby Arora, owner of B&M, sold his Belgravia mansion for just 23.5 million, a 30% loss from the 34 million he paid 10 years ago. Historically, though the UK has undoubtedly won, and many top-level investors will be careful to hedge all their bets here, the risk has reduced massively though and the scale is tipping. The benefits of the UK dwindle each day.

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Long-term vs. short-term

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In the UAE, when selling a property, the landlord is required to give the tenant a massive 1 year notice to vacate the property when he intends to sell, undergo renovations, or move in himself. In the UK, however, the notice period starts at around 2 months and goes up to 4 months, depending on the time spent living there. The laws surrounding raising rent are similar. There is an index that can be used, and a fair amount can be raised in both countries unless stated otherwise. Airbnb regulations in the UK vary by location, with some areas imposing restrictions. Popular cities like London and Edinburgh have clear regulations and high demand. In Dubai, Airbnb has grown massively post-pandemic, but regulations are stricter. Hosts in Dubai need permits and must follow guidelines from the Dubai Tourism Authority. Understanding local laws is crucial for hosts in both countries to operate legally. The competition is higher in London, though, with the city ranking No. 1 on the Airbnb charts with a massive 34,135 listings compared to Dubai coming in 10th with 15,148. The UK will have lower start-up costs, but the UAE's cheque practice makes it extremely attractive from a leveraging point of view, given that you also pay no tax. It must be said though it is significantly hard to set up and for that reason I would recommend choosing a partner whether in Dubai or the UK

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Currency

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The UAE currency is actually pegged to the dollar, which is struggling massively this year. By the end of 2024, Bloomberg predicted that the pound could reach as high as 1.37 to the dollar. For UK individuals abroad, this means that their spending power will increase here in Dubai, and their money will be worth more over here. It does however mean their money is worth less at home should they decide to send it home.

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Education & Health care

Many companies offer free healthcare for families and the quality of service is significantly quick given that it’s private, many will only offer the basic package and it may cost considerably higher should you want to improve the one you have. Each case is though isolated and will depend on your circumstances, in any case it can cost you up to 40k AED. The Uk via the NHS offer free healthcare for all its residents. The waiting times and quality of service is often in adequate due to under funding and many who can afford the luxury will also seek private healthcare. Education is fairly similar, Dubai again doesn’t offer free education and this one won’t be subsidised. Mindful for anybody to consider with fees ranging from 30 - 120k AED per child depending on the place you choose. Again though like the UK many higher net worth individuals will seek to educate their children private although many state schools offer some of the best education in the world. On this One the UK wins clearly.

Cost of Living

The cost of Living for the regular man has reached unprecedented levels since COVID in the UK. The price of the average home has risen 59% since the winter of 2021. The Costs in the UAE are regulated and government linked this means prices are capped and lead to lower costs, essentially they are ran much more efficiently coming in around ￡100 cheaper on average for the same two bedroom apartment.? Many things such average home Internet does cost significantly more in the UAE along with your average mobile phone. It must be said many of the other things are relative and you can spend depending on your cicumstances. When citing numbeo.com they do however say that the average cost of living is higher in Dubai, it must be said though that the tax rate alone more than covers that and at 40% you will feel it a small price to pay when filling up your car which can be done for as little as ￡25.