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Dubai vs. Sydney: A Guide to Real Estate Investment for Australians

January 18, 2025
Dubai vs. Sydney: A Guide to Real Estate Investment for Australians

For Australians, it is a huge financial decision to invest in property. Fortunately, investing locally or internationally could provide some great returns, and the hotspots globally such as Dubai as well as Sydney are emerging with persuasive options.

The economic environment, real estate trends, and lifestyle attraction all contribute towards creating unique advantages as well as challenges for each city.

This article aims to give a comprehensive analysis of Dubai and Sydney real estate markets so that Australian investors can make good choices.

Dubai – A Thriving Real Estate Market

When we think about properties for sale in the UAE, the first name that comes to our mind is Dubai. Against all odds, the real estate sector in Dubai experienced remarkable growth in the year 2024 compared to what was anticipated.

There have been notable hikes in costs of housing for everyone including affordable houses as well as expensive units.

Affordable Properties

The affordable housing sector of Dubai experienced an incredible increase in H1 2024 as stated by Bayut, a top real estate website in UAE. International City and other places have turned out to be ideal locations for those who would want to invest without spending too much in their budgets. Top affordable areas to explore:

  • International City: ROI 8.37%, Average price of studios: AUD 144,884
  • Dubai South: ROI 8.15%, Average price of studios: AUD 181,212

Mid-Tier Properties

The mid-range property market in Dubai has also been very active. Investors still preferred Jumeirah Village Circle (JVC). This is because JVC provides cost-effective and up-to-date facilities that are favorable to a cross-section of people including tenants and buyers. Top mid-tier areas to look at:

  • Jumeirah Village Circle: ROI 8.65%, Average price of studios: AUD 247,885
  • Dubai Silicon Oasis: ROI 9.28%, Average price of studios: AUD 171,382

Luxury Segment

Dubai Marina is still the number one location for high-end properties. There were also significant increases in the cost of villas at Arabian Ranches and Dubai Hills Estate. This sector focuses on rich people who require the very best facilities in their expensive homes.

  • Dubai Marina: ROI 6.82%,  Average price of 1BHK: AUD 675,700
  • Business Bay: ROI 6.66%,  Average price of 1 BHK: AUD 647,920

Investment Advantages in Dubai

People are attracted to Dubai because of the possibility of making a lot of money from investments there, the lack of taxes on rental income, as well as many different kinds of housing for all budgets.

Expatriates and foreign investors find this city even more appealing due to its location at the center of global business affairs.

Sydney – A Stable Yet Costly Market

For a very long time now, Sydney has always topped the list for Australian investors because it is economically stable and offers a high quality of life.

Nevertheless, most buyers face difficulties in affording homes due to the expensive nature of the property market within the city.

Price Trends in Sydney

Although there was an increase in the Sydney property market by 11.6% since the beginning of 2023, this growth seemed to stabilize towards the end of 2024 according to Metropole Property Strategists.

As of now, the median dwelling price in Sydney is AUD 1.12 million; typical stand-alone homes cost about AUD 1.48 million. Be that as it may be expensive, it still experiences an annual growth of approximately 6-7%.

Key areas to explore with pricing details from Domain, a leading Australian property marketplace:

Affordable Properties

Cabramatta: Median house price AUD 980,000.

Fairfield: Median house price AUD 1.15 million.

Mid-Tier Properties

Marsfield: Median house price AUD 1.45 million.

Northmead: Median house price AUD 1.53 million.

Luxury Segment

Coogee: Median house price AUD 4.19 million.

Glebe: Median house price AUD 2.69 million.

Affordability Challenges

Due to the high cost of living in Sydney, a lot of people are left with no other choice but to try their luck in the new upcoming suburbs which include Canterbury-Bankstown and Parramatta.

According to Real Estate Australia, the property prices in these locations have been increasing by 8-10% annually; this provides cheaper options for buyers who cannot afford North Shore’s costly houses.

Suburban Opportunities

Investors have turned to the inner western suburbs of Sydney such as Leichhardt and Marrickville because they are close to the CBD, and a person can get high returns from rents there.

On one hand, there has been an approximate 10% increase in growth rate within areas e. g. St. George and Canterbury-Bankstown attributed to an increase in affordable housing units that are highly demanded.

Investment Advantages

In Sydney, there is a possibility of experiencing continuous growth in investment which arises from the high demand for property driven by an increase in population that surpasses the number of available houses.

This also makes the city a favorable option for risk-averse investors who require stable and predictable returns for their capital outlay.

Comparative Analysis: Key Factors

Affordability

Compared to Sydney, Dubai has cheaper real estate alternatives in every sector. The prices of luxury houses in Dubai can be lower than those of the mid-tier houses in Sydney hence making it a good market for the affordable kind of investors.

ROI Potential

Dubai surpasses Sydney in rental yields especially so in low-cost areas that offer over 8% ROI. On the other hand, while the rental yields of Sydney are fair they are also seen to be promising within underdeveloped suburbs due to lower initial investments.

Market Growth

The dynamic real estate sector of Dubai is evidenced by its fast growth in all sectors. On the other hand, Sydney continues to grow steadily although this growth varies from one place to another due to cost and demand factors.

Economic Drivers

While Dubai profits from being a worldwide commercial center through favorable policies like zero taxes for property investors, Sydney’s economic stability is dependent on the strength of its domestic economy, which is driven by an increasing population and limited housing supply.

Regulatory Environment

The regulatory framework of Dubai aims at luring global investors by having minimal tax and streamlined processes. On the other hand, Sydney has stringent regulations which comprise stamp duties among other taxes hence affecting the total profits earned.

Conclusion

Investors looking for affordable ways to get high returns from various kinds of investments have a good option in Dubai.

However, Sydney will always be there for those risk-averse investors who prioritize stability, as well as growth over the long term, and wish that their houses were close.

All in all, it depends on what you want to achieve financially, how much risk you are ready to take and what is your lifestyle like; therefore, both cities are attractive for investment but for different types of investors.

Frequently Asked Questions

Q1: What are the tax ramifications for Australian investors in Dubai vs Sydney?

A: Dubai has no real estate investment taxes, but Sydney has a complicated system with stamp duty and land tax for international investors. This makes Dubai more tax-friendly.

Q2: What visas do Australians need to invest in Dubai real estate?

A: Australians wishing to make Dubai real estate investments do not need a particular visa to make the purchase itself. Purchasing property in Dubai requires a valid passport as residency is not required for property ownership. Australians who want to live in Dubai after their investment, however, may seek many different types of investor visas linked to their purchase of property.

Q3: How do financing options compare for buying properties in Dubai vs Sydney?

A: With 50–60% LTV, reduced loan rates (3–5%), Islamic financing, and developer plans, Dubai has diverse financing options Sydney charges stamp duty and property taxes, needs FIRB approval, 30% to 40% deposits, and has higher interest rates—6.5 to 8%.

Soho
Soho is your expert team in Australian real estate, offering an innovative platform for effortless property searches. With deep insights into buying, renting, and market trends, we guide you to make informed decisions, whether it's your first home or exploring new suburbs.
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