Why Do We Keep Making the Same Mistakes Over and Over?

Ask most people what drives Foreign Direct Investment (FDI), and they’ll likely mention oil, technology, or manufacturing. But real estate? It’s often overlooked, despite being one of the biggest drivers of foreign capital inflows.

Take DarGlobal, which operates across countries like the UK, Spain, Oman, UAE, Saudi Arabia and Qatar. In most of these markets, the majority of our buyers are non-nationals: investors injecting fresh capital into the local economies. Our entire marketing strategy is, in fact, built around creating global demand, directly fueling FDI.

Still, real estate has yet to get the recognition – or “preferential treatment” – as other industries. Policymakers seem to undervalue developers as key economic drivers, not just in attracting investment but in promoting entire destinations. After all, international buyers don’t just purchase homes; they visit, spend, and recommend these locations to family and friends.

The Countries That Get It

To be fair, some countries – the UAE, Saudi Arabia, Oman, Qatar, and Greece – have embraced real estate-driven FDI. They’ve built supportive ecosystems for both developers and buyers, offering golden visas, tax incentives, and smoother processes. For example:

-Dubai recorded $172 Bn in real estate transactions in 2023, with 42% of new investors being non-resident, thanks to zero income tax, zero VAT on residential property, and a 10-year Golden Visa program.

-Greece’s Golden Visa program contributed at least €4.4 Bn in foreign property deals to a €41.2 Bn real estate market, supported by zero VAT on residential real estate.

The formula is simple: welcome investment, and you’ll get more of it.

The Short-Sighted Approach

In contrast, many western economies are doing the opposite, deterring foreign investors through taxes and bans, in the name of protecting local buyers and balancing budgets. Why this shortsightedness? I still don’t get it. And neither does the data.

I’ll use Spain as an example – not to single it out, but because it’s the most recent case. The government is proposing a 100% tax on property purchases by non-EU buyers to tackle housing affordability. But according to The Economist, foreign investors aren’t the problem; supply is.

Spain builds just 2 homes per 1,000 people, compared to 3 to 4 in most Western countries. New households form at 3x the rate of new construction (250,000 per year vs. 90,000 built) Foreign buyers accounted for just 27,000 sales in 2023 (a small fraction of total transactions)

The takeaway is clear: Targeting foreign investors won’t fix a 500,000-home shortage.

Foreign Investors as Net Profit

The logic behind these restrictions ignores a fundamental truth: foreign buyers and local buyers are two different types of consumers, playing in two different markets.

-They don’t compete with locals for primary residences – they buy second, vacation homes

-They don’t strain public services – no free healthcare, no free education, no subsidies.

-They visit and spend more than regular tourists – fueling F&B, retail and entertainment.

-They bring money in, not out – every foreign dollar is new capital entering the economy.

So why do we keep driving them away and losing on that precious FDI?

Partnering for Growth

If there’s anything the last 20 years have taught us, it’s that a property sale isn’t just a one-off transaction but a ripple effect: More capital. More jobs. More tourism. More global relevance.

And if there’s anything we need to do today, it’s to start seeing foreign buyers for what they truly are: powerful, sustainable drivers of growth. Countries should be partnering with developers to facilitate investment, because people and capital flow where they’re welcomed.

Right now, only a handful of countries understand this. How long before the rest keep making the same mistake before they realize what they’re missing?