Dubai Property Rental Boom

With the growing population of Dubai increasing daily with new businesses starting,finding that home in Dubai has become extremely difficult. With currently around 3000 Dubai properties under construction including many super towers,many companies are finding problems obtaining reasonably priced Dubai properties for people to live in with certain areas of Jumeriah and Dubai Marina being the only places available to rent now. Recently my company was quoted ,000 for a year’s rent for a 3 bed property for an ordinary guy with a wife and 2 kids,looking to start at new life in Dubai. Many Landlords who got on the property ladder at the beginning of the property boom in Dubai are making fortunes with the rent of the properties that are now ready for occupation.

With new development calls for the office and commercial space this is certainly no exception,likewise rental prices have risen significantly for completed offices and often a bidding war taking place. New commercial releases are being snapped up even though they are overpriced by many investors looking to cash in from this shortage of rental properties.

The cheaper alternative is Ajman,a neighboring emirate. Properties can be found quoting a 25 minute journey time into Dubai,sounds like a great option but with construction traffic and employees commuting to work the road is gridlocked from 5am through to 11.00 am .It is hoped by the locals that the new Metro tram system which comes into operation in 2009 will take some of the traffic off the road,until then if you want rental property be quick because it is certainly a first come first served basis.

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.

Boom in Dubai Property Investment

Until a few years back, buying freehold property in Dubai was not possible for foreign nationals. Property boom in Dubai only ensued after some considerable changes were made to the emirate’s property laws. Currently, Dubai real estate sector is witnessing a rapid upward trend that’s expected to go even higher with the passage of time. Population of Dubai has grown manifold over the past few years given a sharp and growing increase in the number of expatriates. Both veteran and would-be investors across the globe are eyeing Dubai as the property investment paradise for a long time to come. Property for sale in Dubai has already succeeded in drawing the attention of foreign investors.

Investment in Dubai property, whether it’s buying property in Dubai for permanent relocation or business, or you simply want to cash in on the most popular investment trend in Dubai property i.e. buy-to-let, is very lucrative. The immense development Dubai continues to undergo with massive infrastructure projects reflects the exploding need for space for the country’s multiplying populace. Given these circumstances, the boom in Dubai property market doesn’t seem to slow down at any point in the foreseeable future. These upward trends of Dubai real estate make investment in Dubai property extremely risk-free for foreign nationals and they can choose to invest in Dubai even with their eyes closed.

Nearly all of the buyers of Dubai property find property resale and buy-to-let trend as the most attractive features of property ownership in Dubai. Some recent announcements point towards Dubai’s becoming a tourist hotspot in the near future with more recreation than ever. Newer entertainment and recreation projects are underway which have already drawn a great deal of international attention. The emirate, which is already termed as a playground in the desert, is soon to have more to offer to the world’s recreation seekers. This much international focus means an even stronger property market potential with returns that continue to shoot up.

To the benefit of investors, though not a positive sign for the buyers with no commercial intent, the demand for Dubai property, Dubai apartment, Dubai villas or any other type of property in Dubai by far outstrips the supply. This demand/supply disparity makes Dubai property investment an extremely attractive prospect for the foreign investors. As the experts of Dubai property forecast, the market is lucrative for the investors who already bought property in Dubai. But the market is not so friendly for those seeking rental property right now. If you’re one of those lucky enough people who have already secured property in Dubai, you’re likely to be reaping profits. But if you’re on the lookout for a decent rental accommodation in Dubai, you might have a hard time ahead as the prices are very high and are set to rise higher.

Experts speculate that the population of Dubai will be doubled in 2010. This will turn Dubai into one of the world’s hottest destinations for expatriates and holidaymakers alike and this just bodes so exceptionally well for property investors.