Property is cheap in absolute and relative terms. There are very few modern cities in the world where high-standard property is priced so low.
Foreign Ownership
Dubai is in the process of creating an international property market from scratch, with foreign ownership of freehold only introduced last year. Thus buyers are given an exceptionally good deal to encourage them to be pioneers.
Shortage of supply
The Dubai Government is working hard to prevent a shortage of supply and is giving land to developers as an incentive. What looks like massive supply today in Dubai may be nothing compared with demand in a few years time. Dubai is after all growing its GDP by 7-8% a year and shows no sign of slowing down, quite the contrary.
Rising Building Costs
A fundamental influence on property prices are rising building costs. The low US dollar is pushing up the cost of materials from Europe which is pushing energy prices to its peak.
Tax Free Income
Dubai is a city where a lot of people earn high tax-free salaries and are in a position to support higher house prices. This is a city with a 20-year track record of strong economic growth and will continue to attract foreign and regional inward investment.
International Business Centre
Long recognised as the leading regional trading hub of the Middle East, Dubai has now become an international business and re-export centre.
The country has developed rapidly over the past 10 years and has transformed itself from an oil dependent regional entrepot into a highly diversified international business centre of global significance, which offers opportunities for UK business people in all sectors. At Present, over 5000 UK companies have been set up in Dubai. Dubai is going from strength to strength. Rental yields of up to 15% are achievable in Dubai compared to under 5% in Central London. Returns for investors properties are appreciating steadily at the rate of 10% - 15% per annum, (for some developments even greater). It is estimated that by 2010, based on current growth, your initial financial investment is expected to at least double.
Dubai Outlook
Dubai s property market is set to grow much faster over the next decade, compared to the past 10 years. Evolving regional stability along with planned new development initiatives will continue to attract regional and international investors to Dubai.
The decision to allow non-UAE citizens to purchase freehold property has provided a major boost to the property development sector, kick starting a diverse range of projects that have encouraged foreign investment. The UAE s political and economic stability, combined with a tax-free environment and the high rate of return on investment will continually aid the property market.
Driven by vision, the city is going to attract a lot of quality and knowledge workers to the Emirate which will drive future growth in the property market. Currently the supply seems to be less sufficient with the projected demand which is expected to cause high appreciation in the years to come. There will be continuous demand for real estate property at the mid to high segment of the market, and parallels phased growth schedules charted out by major real estate developers.
Dubai is a relatively small city and most of the land in Dubai is either a desert or is now allocated to various development projects. Successfully on the verge of completing numerous projects in the next 3 years, Dubai is going to become the ultimate tourism destination in the world.
Once these residential projects are completed, investors will realise the magnificent quality of the real estate products and a strong global infrastructure in place.
Dubai s planned marketing activity continues to attract businesses, investors and tourists which should continue to fuel the value of real estate properties. The network of current buyers will generate a snowball effect of new property buyers. Current investors already realising the potential returns of their investment will lure their contacts and so on, and such growth will definitely put pressure on property prices in the market.
Government incentives, modern infrastructure, new flexible legislations and rapid increase in population, are turning the local real estate sector very attractive for investors. There is no specific federal land law in the UAE, however, each Emirate has established its own specific land ownership policies through local orders and decrees and as per its own economic and other relevant circumstances.
Dubai has been witnessing major developments in the property sector during the last four years, and is all set to enact its real estate law. Foreign and expatriate investors all over the world have been offered some unlimited facilities with government guarantees, compensations, health care and education for their children; for they represent an asset to the country they operate and live in.
The Property Market
In the pursuit of excellence the Government has always looked upon the private sector as full partners. With no personal, corporate or sales taxes, foreign direct investment has expanded strongly and mega projects have become synonymous with Dubai development.
The thriving economy of Dubai, the state-of-the-art infrastructure and standards of living that are unsurpassed almost anywhere else in the world, have earned Dubai the name "Pearl of the Gulf".
Dubai has been a prosperous and well-respected tourist location for decades. The Emirate seeks to reposition itself as a regional hub for finance, tourism and technology by widening its present focus on trade and re-export activity.
The Dubai property market is booming and is set to continue to do so over the next decade. Dubai has taken steps to scrap its protective property laws and is positioning itself as a holiday home destination, which also offers plenty of property investment opportunities.
Reflections can be seen through recently built or proposed massive projects such as Dubai Marina, Emirates Hills, Palm Islands and many more.
Developers are busy reclaiming vast swaths of desert to build leisure and residential property havens. British expatriates, Saudi Arabians, Iranians and Indians have already been rapidly purchasing properties in these new areas.
The city is undergoing constant transformation as the new developments dotting the skyline testify. In particular, the Dubai marina on the Arabian Gulf is testament to the changing face of the city. Three years ago it was sand but today over a hundred tower blocks huddle around the vast artificial lake and retail spaces.
The liberalisation of Dubai s property laws is such that foreigners can benefit from a resident visa if they purchase properties. Mortgage financing is also becoming more readily available on a 10 to 15-year basis and as interest rates are linked to those in the US they are currently low.
