Dubai Property Market Prospects

Introduction: Dubai has been one of the biggest success stories in the overseas property industry. The growth in the market,which in the first 11 months of 2007 was reported to be 18.7 per cent in both villas and apartments,has sustained at a high rate for some years now,prompting some investors to buy sight unseen. Commentators are split as to whether this growth can be sustained,but investment in the real estate sector is predicted to provide 35 per cent of Dubai’s GDP over the next five years.

Supply & Demand: One of the biggest contributory factors in the growth of the Dubai property market has been the fact that demand has always managed to outstrip supply. The regular shortfalls in supply are often due to late-running projects and the immense speed of the influx of new workers and residents who all need somewhere to live.

Investment bank EFG-Hermes has reported that the market will be subjected to its biggest shortfall in supply in the second half of 2008,which means prices will hit a peak of sorts this year. After that,the report suggests,the market will begin to swing in the favour of buyers. It says there will be 64,000 units to come onto the market as available for occupation in 2008,and a further 68,000 in 2009.

Tourism: Tourism is the most important industry for the future of Dubai and is also its fastest-growing industry,with over 11 per cent of the GDP coming from holidaymakers,and generating .9 billion of economic activity. The introduction of huge new attractions will fuel the growth in tourist numbers,who will be serviced by the huge new Dubai International Airport.

On the other hand,the number of hotel rooms in the Emirate is set to rise by around 33 per cent per year until 2011,which has led industry watchers to suggest that hotel occupancy rates may fall as low as 60 per cent,compared to the current levels of more than 80 per cent.

Immigration: The lenient tax regime in Dubai has been one of the major attractions for property investors and a large number of businesses,many of which are multinational companies,and some of which have made their headquarters in Dubai. The investment banking sector is predicted to undergo huge growth in Dubai in 2008,adding to the internet and media hubs in the city. This brings with it an influx of people with large salaries who are looking for somewhere to live,and should also employ a proportion of the local population in well-paid positions.

Rentals: Letting property will be one of the most important parts of the future for the Dubai property market. Since November 2005,there has been a government-imposed rental cap at seven per cent of the property value in order to protect the tenant market from potentially astronomical rises in rental costs due to the gap between supply and demand. This cap is currently not due to be renewed at the end of this year,allowing landlords a completely free market. This will push many locals in Dubai to consider buying their own property instead of renting to protect themselves from the potential rises.

The real estate market in Dubai has had its detractors for some time now,people who seem to be keen to see the property buying boom there come crashing to a halt. However,Dubai keeps on fighting back,sticking resolutely to its free,tax-efficient methods. The result has been a highly modern centre of business excellence,leisure activities and innovative development.

Dubai Property Market Cooling

In Dubai there are now strong signs that the government is getting some sort of grip on the excesses of the Dubai property market - and about time too. We have long viewed the market as quite high risk. The market has an unusual set of drivers and is not exactly the most transparent place to buy property.

The huge amount of building there inevitably raises questions about oversupply,but seemingly so far demand has outstripped supply.

Price growth in some parts of Dubai has been reported to be an almost unbelievable 79% in 2007,that is on top of already impressive growth figures in the previous years. High growth is continuing in 2008.

Now in mid-2008 the government is stepping in to to regulate off-plan purchases,mortgages and are implementing a whole raft of measures to cool the market. These are likely to do the job they are intended to do.

Like some of the buildings in Dubai the property market has seemed to defy gravity. With high prices and more heavy government intervention I would be even more wary of investing in Dubai than I have been in the last few years. It remains to be seen where the Dubai property market will head next and whether the Dubai government can really use their oil money to turn a patch of desert into one of the world’s true commercial and financial centres.

Overall,I would avoid Dubai as an investment location,high investment returns can be made elsewhere for much lower risk.

Dubai Property Market - An Investor’s Viewpoint

The Dubai Property for sale market is probably one of the most watched and fastest growing property markets in the world, and has been for the past 2-3 years. Real Estate agents and agencies in Dubai are popping up all over the place and developments are rising out of the desert at a pace that puts most cities to shame. Property prices as well have been attractive for investors over this growth period, with many people who decided that buying property in Dubai is a smart move, are experiencing a return on investment (ROI) of sometimes 100% in a matter of two to three years. One shouldn’t expect this amount of growth to continue as the property market in Dubai begins to mature, but there are still an ample amount of attractive developments and financial incentives to make people think long and hard about Investment Property in Dubai. One of the most attractive things about the property market in Dubai are the new property laws that were established in early 2006, that put more stability into the property market, and helped to assure investors of their rights.

The property market in Dubai, however, isn’t for the novice investor and does take a bit of due diligence for those people looking to make some money. One of the most important factors to consider when thinking about buying Dubai Property is whether the developer is reputable. Since the property market has grown so quickly, it has left room for first time developers to attract investors with flashy pictures and 3D models of Dubai Apartments, but without any real experience in property development. Eventually this means a lot of new home owners are moving into their new Dubai property and finding lots of structural faults. That said though, the Dubai Property rent market has almost made this a moot point, as the demand for rental properties in Dubai are such that landlords can rent anything for near record prices and consumers have no alternatives. Hopefully with the passing of the new Dubai Property Law, this will be eased in the future.

Dubai Property Investing

The Dubai real estate market has grown significantly since the introduction of freehold property law in 2001,and as a result,there are a large variety of finished developments,and exciting developments under construction.

Another reason for the current buoyancy in Dubai is largely down to the fact that local investors are reining in their overseas ventures because of the above list of issues and they are focusing significantly on investments in their own backyard. So Dubai property is doing quite nicely,thank you out of the fact that interest in the region is certainly not abating.

Furthermore,there are many options for those who want a good return on their initial capital outlay and the selection of Dubai properties can suit many budgets. It is because of this that investors need to move quickly,but smartly,when it comes to planning to invest in Dubai property. It is vital to make sure that investors not only get the right advice,but also that they get the right property.

Due to wide range of Dubai property selection,it is easy to find a suitable property. Dubai property prices can offer you from low to high end cost,whichever would suit you. There are many different styles of Dubai properties,many different buildings which cater for contemporary,modern and traditional tastes. All Dubai property is expertly made and lovingly furnished and can offer you great year round rental possibilities. Rental in the Dubai property market is a big industry,you can make year round profits from your investment and you can make money even when you are not in Dubai.

Further boosting the success of Dubai property is the rate at which tourism in the UAE is increasing as well as the rate at which international businesses are expanding in or recolating to the region. Due to the innovative projects that have been announced for freehold development,there has been a huge increase in interest from overseas investors and the Emirate of Dubai is now regarded as a top tourist destination and top place to own a home. The rate at which the population is expanding in Dubai is fascinating,but more fascinating is the fact that this population expansion is not expected to slow down any time soon. More residents and more popularity have caused prices to generally rise,but due to the competitive market for property,there is such a large,diverse market with real estate for every type of budget.

When you think of property investment seriously consider Dubai as the only place to buy!