How to preserve money from inflation in 2025 through real estate investments in Dubai

Earning enough money for a comfortable life, and especially building up savings, is not always easy. This is the exact reason why people want to protect their money from inflation, economic crises, unexpected circumstances, or theft. But is there a reliable way to keep money safe? Can investment generate stable profit? What should investors know before putting money into real estate? And how can financial losses be avoided? Let’s look at all these questions one by one.

What is inflation?

The term inflation comes from Latin and literally means “swelling”. It refers to the general increases in the prices of goods and services. During inflation, prices for goods and services rise, which reduces the purchasing power of the population.

It is important to keep in mind that a simple price increase of a specific product is different from inflation. Inflation is a longer-term process that affects the country’s whole economy, and individual goods may behave differently and may not always follow the overall trend.

Investors who suffer the most are those who keep their savings in a currency affected by inflation. To reduce losses, some people choose to move their money into a more stable currency or look for investment opportunities. However, no currency is fully safe from external economic factors and can lose its value at any time. Because of this, fully relying on currency storage is not considered a truly reliable way to preserve savings.

Recognizing this problem makes people turn to investing as a way to preserve and grow their accumulated funds.

Where to invest in 2025?

If someone has decided to start investing, it is worth understanding the different investment options, along with their advantages and disadvantages.

• Stocks

Stocks are one of the most popular investment options. Many brokers successfully trade and earn profits from stocks, futures, and cryptocurrencies. However, for beginners, the stock market can be very risky. In addition, in 2024, most stocks fell by 10%-50%.

• Bonds

The situation with bonds looks more stable. In 2024, investors lost up to 10% or gained up to 7%. However, after taking inflation into account, these results cannot be considered impressive or comforting.

• Gold and other precious metals

2024 showed that even investments in gold can lead to losses, and that prices of precious metals constantly fluctuate.

• Cryptocurrencies

Often referred to as the currency of the future, crypto has attracted a large number of investors in recent years. Its growth potential and independence from governments have drawn billions of dollars into Bitcoin and altcoins. Unfortunately, many investors have also suffered major losses. In 2023-2024, Bitcoin dropped by around 72%, becoming one of the worst-performing assets for those who invested at the wrong time. At the same time, 2025 promises to reward long-term holders who stayed patient or bought during major dips.

• Investing in your own business

Starting your own business is always a gamble; you can either significantly multiply your investment or lose everything and even end up in debt. During periods of crisis or inflation, when consumer purchasing power declines, starting a new business becomes especially risky.

• Investing in real estate

Real estate investments for rental purposes generate steady income for investors. The profit level always depends on the city and country where the property is located. Over time, property can also be resold at a higher price, allowing investors to earn from both rental and property appreciation.

Real estate investments in Dubai

When choosing an emirate to invest in real estate, it is worth considering and paying close attention to Dubai. It is a fast-growing city that attracts millions of tourists and many people who move here for permanent residency. Investors are especially drawn to Dubai because of its favorable conditions when it comes to real estate, taxes, and services.

The laws and legislation in the UAE strongly protect investors’ interests. Anyone can invest in several sectors in Dubai, including;

• Ecology and green economy;
• Energy;
• Farming and agriculture;
• Financial structures;
• Transport;
• Real estate.

Property in Dubai can be purchased not only by citizens of the UAE, but also by foreign investors. They get full ownership of the property and can rent it out or sell it freely. Another advantage is the absence of property tax and high returns of up to 10%. In comparison, in European cities, this figure usually does not exceed 3%.

Liquidity of real estate in Dubai

One of the key factors when investing in real estate is its liquidity; regarding this, Dubai clearly stands out when compared to other major cities around the world. For example, luxury properties increased in value by 44% in 2023 and continued to grow in 2024. For more affordable properties, the growth is less significant, but the overall market has shown steady growth every year across all segments.

Many investors in Dubai don’t just buy property to hold it; they also choose to rent it out for short or long term. The demand for rentals in Dubai is very strong and attracts a constant flow of tourists, business travelers, and people who look for a luxury lifestyle, all of whom look for apartments, villas, and townhouses. Rental prices in Dubai constantly continue to rise, which allows investors to generate even higher returns.

Creating an investment plan

Simply wanting to invest is not enough; without a clear investment plan, there is always a high risk of losing part of your funds. That is why every beginner investor should know and understand a few important principles before getting started.

• First of all, it is important to evaluate your current financial situation. For investing successfully, factors like the investor’s age, existing investments, and the amount of available funds should all be considered. At this stage, it is also important to take into account any existing debts, loans, and other financial obligations.
• The next step is setting an investment goal. It is important to understand why you want to invest and why you chose this field. Money should not be invested simply because someone you know has done so, just as you should avoid investing only because you want to be the first among your acquaintances to try it. More reasonable goals may include securing a comfortable retirement, leaving an inheritance for children, or saving money to start your own business. At this stage, it is also useful to determine the level of profit you hope to achieve.
• The third step is deciding on the amount that you are willing to invest. A useful approach for this is the 50/30/20 rule. According to this, 50% of income can be used for everyday expenses, 30% of income can be reserved for savings and unexpected situations, and 20% of income can be allocated towards investments.
• Finally, it is important to create a financial reserve for emergency situations. Before investing, you should have savings available to cover any unexpected expenses that might arise. This helps avoid situations that might force you to exit an investment under certain conditions.

After considering and completing all of these steps, you can move on to investing. At the same time, it is important to work with a professional real estate agency when searching for property to invest in. Working with a professionals will help minimize the risk of purchasing illiquid or low liquidity property.

Investment strategies in real estate in Dubai

After deciding to invest in real estate in Dubai, it is important to know the main ways to generate profit.

• Purchasing residential or office property for rental purposes. On average, this provides annual returns of around 8%, and the most liquid properties can reach 15-25% depending on the area and type of property.
• Purchasing hotel property to generate passive income. This can be seen as a type of rental business, but the difference is that the owner does not need to handle any sort of management or marketing, as the whole process is controlled and organized by the hotel operator. The owner receives net income either quarterly or, in some cases, twice a year after reporting and profit distribution.
• Purchasing property during the construction phase and selling it when completed. In the most demanded areas, resale profits can range from 50% to 100%.

In luxury areas such as The Palm Jumeirah Bay, returns can sometimes reach 200-300%.

Whichever strategy you decide to choose, it is always important to carefully assess the risks and follow a clear investment plan. Otherwise, there is always a risk of losing part or all of your savings.