Dubai property Is Over - Hardly

It seems that every time I tell someone what I do,I get the same reply. It goes something like this

“Dubai property is over,yesterdays news”

“Really?” I say,

“Absolutely,it was booming a few years ago but not anymore”,

“According to whom?” I ask

“Everyone”

Good news all round

It seems that the property developers don’t share these concerns as billions of dollars have been invested into projects newly announced this year. The largest project announced in Dubai to date was announced this year. Capital values haven’t stopped increasing and concurrently neither have rental values.

The finance market is on the up and starting to mature. A broader range of finance products have been announced by existing banks offering more sophisticated and developed options as well as many newer banks moving in and presenting their spectrum of products.

There are also an endless number of articles by financial advisers which sing the praises of investing in Dubai property. These cover topics such as the new property laws that have been introduced which have supported international investment in Dubai through to anecdotes about 25% of the world’s cranes being located in Dubai.

It is hard to believe that so many large organisations that have invested billions in Dubai have not done their due diligence beforehand.

No news is bad news

It seems that the concerns of the naysayer arose not from negative reports of Dubai but rather a lack of positive ones. All this information is not filtering through to the public at large,at least not in the UK. Dubai is no longer mainstream news as it was five years ago. The novelty of giant artificial islands or an entire brand new city made from the ground up in the desert has worn off. In order to find new information,specialist news services on the Middle East or international economy and property have to be read.

As a result people are not as excited about Dubai property as they were five years ago when it could be argued that it is now a more exciting time. Emirate Ventures Ltd,a UK based Dubai property agency,has seen a healthy level of inquiries and sales continue despite this change in perception.

Everyone is an expert apparently,but the real experts agree that Dubai is not over by any means. It has matured and continuing to grow at a very healthy pace.

Dubai or not to Buy? A Short Assessment of the Dubai Property Market

Never has there been such an ambitious and creative drive to establish a property market as has been witnessed in Dubai over the past three years. Running short on oil reserves,Dubai’s crown prince,Sheikh Mohammed Al Marktoum,set out to turn Dubai into the financial,commercial and tourism capital of the Middle East and in the space of three years he has more than succeeded. The country’s GDP has expanded by 17 per cent over the past year and HSBC Bank estimates that there is .5 billion worth of projects under construction,compared with billion for the rest of the neighboring oil states put together.

The result has been the rise of Dubai as the world’s most glamorous property investment market. Nothing in Dubai is understated. The tiny emirate,that only five years ago was nothing more than a simple fishing village has suddenly become the Manhattan of the Middle East. Following the mantra ‘bigger is better’ Dubai has proudly announced the world’s first seven star hotel,Burj Al Arab and is set to construct the world’s biggest shopping mall,the first underwater hotel and amazingly,the longest indoors ski slope.

Already the annual number of visitors stands at 5 million and is set to rise to 10 million by 2007. The scale of development has been unprecedented with apartment blocks being constructed by the dozen and selling out within days to hordes of zealous investors prepared to queue overnight to bag a bargain in Dubai. The projects being released are some of the most inventive and ambitious the world has seen,with man made islands such as The Palm and more recently The World capitalizing on the attractions of beach front living and redefining the world’s geography in the process.

With real estate as out of the ordinary as this,it’s not difficult to see why Dubai’s property market is attracting such large-scale international interest. There really is nothing like it and it seems everybody who’s anybody will have a piece of Dubai. Dubai’s more exclusive developments are being snapped up the celebrity classes and the world’s elite. Ageing English rocker,Rod Stewart is already the proud owner of Britain [The World's miniature Britain that is!] and villas along the Palm are being bought by sports stars,film stars and anybody with upwards of €1.5 million to spend on a private waterfront retreat.

If so much has been achieved in three years,where is Dubai to go from here? Nakheel,the company behind the extraordinary Palm and The World projects already has its eye,literally,on a new development. Dream City,like the Palm is also a series of man made islands but out sizes the Palm significantly. When finished,Dream City will form the shape of an eye,with the residential element on giant eyelashes extending out into the Persian Gulf. Villas at Dream City start at €425,000 for around 371 sq m (4,000 sq ft) of accommodation. Townhouses start at €200,000,while one and two-bedroom apartments start at €150,000.

For the property investor seeking a lucrative return,a new market is always a risky one and the fear is that the market may collapse soon after it has taken off!. With plenty of anecdotal evidence to suggest that property prices in Dubai are rising by as much as 60% in one year,it’s tempting to rush straight in and grab a piece of the action. But the canny investors will have to consider if it is too much too fast.

The pace of the property market in Dubai makes is a speculators dream. It’s not unheard of for properties to have been transferred up to a dozen times even before the building is complete. Many opportunistic investors are booking 10 to 20 villas in new developments,selling them at significant profits before they have been completed.

Cashing in on this and perhaps in an effort to cool the market,builders are charging a fee of up to 7% each time a property is transferred and lending institutions are trying to keep some control on the market by agreeing to finance only the original sale price. In the secondary market,prices can exceed the original price by 10-70%,depending on the development’s popularity.

All the indications are suggesting that the initial hype is easing and prices are settling. A year and a half ago 900 houses in one development sold out in 7 hours. Many believe that demand will continue to be sustained and prices will continue to rise,though not at the frantic rates they have been rising over the past two years.

In comparison to other new and emerging markets,such as those in Central and Eastern Europe,Dubai appears to be a more attractive investment. Prices in the middle market are comparative to those in Eastern European cities such as Tallinn and Krakow. Unlike these countries Dubai has the sunshine factor and a glamorous edge,which is surely contributing to the high immigration from Europe,the Gulf Region and the Indian subcontinent. Over 100,000 extra people are expected to arrive in Dubai every year. Such large-scale immigration is sure to sustain the property rental markets.

Other property markets are seeing rental yields drop through the floor. Too many investors buying up properties and not enough tenants to rent them! Ireland,Britain and many of the New European capital cities are seeing yields drop to below 3%. In Dubai,rental yields have dropped from a very healthy 8-9% but are now holding firm at 6-7%. The fact that in Dubai rents are paid in advance,sometimes up to one year in advance,is surely a motivating factor for those considering a buy-to-let property in Dubai. On the downside,service charges on new development can be high,anywhere up to £4000 per annum and may be requested by the developer upfront!

Despite the current boom and huge immigration into Dubai cautious investors are raising understandable questions about the security of ownership in the UAE. As yet,no law has been passed to confirm the right of foreigners to own property in any of the projects launched to date. However,the UAE allows individual emirates to issue their own legislation to regulate ownership of real property. While Dubai is committed to encouraging overseas investment,they rule by decree and decisions can be changed overnight the whim of the current ruler. The government have promised that freehold would be granted in the near future. When this happens it is likely to further boost investor confidence in the Dubai property market.

If the property market in Dubai is to develop with any degree of stability,capturing the interest of second homeowners and expats seeking to relocate is essential. If the market continues to be speculator driven,the possibility of a speculative bubble is not unlikely. A revision of property ownership laws for foreign investors should encourage a more stable property investment climate,helping to avoid any crash that might be caused by a quickly exhausted investor base of opportunistic speculators.

Dubai Property Market

Many investors,potential investors and casual observers seem to still have doubts about the safety of purchasing property in Dubai,even as the property market continues to expand through its fifth year. At the same time,the latest Cityscape Dubai event (4-6 December),which showcased both future and current projects,was once again a testament to the unprecedented scale of activity and level of enthusiasm in the industry. It was without a doubt a grand display of where the property markets in Dubai and the Gulf are and to where they aim to go.

Beyond the glitz and hype,however,the fundamental questions for investors remain:

* Will property on offer in fact make it to completion even once construction has commenced?

* Will the quality standards promised be achieved?

* Will delays plague the project?

…and not least,

* Will one’s investment be guaranteed,at least up to the time of hand-over,and beyond?

The Dubai Marina site of Damac’s Ocean Heights tower (8-Dec-06),launched in Oct. 2004. Originally slated for completion in 2007,now estimated by some for a 2009-10 completion.

The short answer to these questions is that results will vary by project and developer. The broader picture,as it were,is hard to comment upon with the relatively limited number of properties that have made it to completion and,even more so,with the limited amount of scrutiny paid by both the media and the government to problems and issues that have come up.

That being said,anecdotal evidence is available. One source is the Gulf News’ archives along with those of other local publications,where search queries can pull up news,good and bad,on both specific properties and the industry-at-large. The online forums of Skyscrapercity.com also offer a wealth of insight into the the real goings on in the property scene-it requires considerable sifting to get through the innumerable exchanges among forumers.

My own take is based on a personal,albeit perhaps biased,scrutiny over the year and a half that I have taken steps as an investor. The skinny,as I see it,is as follows:

* Emaar,among the large developers,shines. Its projects get built in a timely fashion and are of both satisfactory design and quality. This record may placate some of those who balk at higher purchase costs. While there have been complaints about build quality,there seems to have been no real disasters. By contrast,however,property management fees seem exhorbitant compared to other properties and what one gets for them.

* Nakheel has a mixed record,including a disaster or two,and it has in some measure yet to prove itself. The verdict on Nakheel should remain pending until handover of its Jumeirah Palm properties over the next half-year,should that highly-anticipated move in fact take place.

* The other large developers,including Dubai Properties,Sama Dubai,Damac and others,have yet to prove themselves,even more so than Nakheel. For most,significant delays appear to be the order of the day. Reassuringly,however,if the record of Dubai Properties,builder of the 40-tower Jumeirah Beach Residences complex,is anything to go by,then ambitious projects can and will be delivered,even if late.

* The mid- to small-size developers are a harder lot to classify,not only due to the fact that they are many in number,but many of their projects are yet in the early phases of build or development. There is,for example,Tameer with a 107-story tower and a 91-story tower under development in Dubai Marina,in addition to several other major projects on the drawing board. This perhaps wannabe major developer has no existing record of delivered or even half-constructed projects to evaluate.

Although Dubai Marina is a master-planned project of Emaar and contains a number of Emaar properties,it is in large part being built-up by mid- to small-size developers. This means that to really evaluate the merits of the development-at-large or any specific project,the reputation and record of the specific developer in question needs to be examined. The one generalization that one might make,however,is that excluding the JBR project,fewer than half of the Marina towers have yet been built with most of the largest ones not yet started or in the early stages of construction.

The big picture must take into account some of the dynamics of the Dubai and larger Gulf real estate and construction industries,which substantially impact the success or lack of success in each project. These dynamics include,

* a large unskilled,poorly trained and poorly paid construction workforce,

* intense competition for skilled and experienced managers,consultants,contractors and the like,and similarly

* tight supply of equipment and materials.

Added up,it is hard and will continue to be hard to get things right. The powerful,like Emaar,will have more leverage but likewise they will be less accountable to any individual client. The smaller players will struggle to get what they need to pull the job off,but it is more essential to their survival that they do,even on the smaller jobs.That being said enough work has been carried out over the past 5 years that the industry has begun to enter a middle stage where there is a significant level of expertise locally. Even the underpaid,overworked laborers in time pick up a considerable amount of skills on the job. As this happens,getting the job right increasingly becomes an attainable goal.

A look specifically at the ongoing projects in the Upper Marina or tallest block will follow,to shed some light on the individual projects there.

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!

Dubai Property - Dubai Real Estate

We are known in Dubai as the Palm Island specialists,having dealt with these fantastic man made islands since they were launched by Nakheel a few years ago. Therefore,if you’re looking to buy a nice little mansion by the sea with the height of luxury,then here’s some Dubai real estate that you should take notice of Palm Jumeirah’s and Palm Jebel Ali signature villas,garden homes,garden villas,water homes and shoreline apartments are the fastest moving properties on the local market here at the moment,with many fantastic investments for the high net worth individual.

They may not be what everyone wants,they probably aren’t what a lot of people can afford,but to all those investors that like the idea of living on an island in a really big house (I’m guessing most),then read on as we will give you a taster of what is out there.

The Palm Jumeirah,phase one of the Palm trilogy is located just off the beach after the Burj Al Arab (large hotel that looks like a sail) in the up market Jumeirah area and is already home to the residents of fully completed sections,these are called “fronds”. If you have seen the pictures of the fronds,you would probably think its just rows upon rows of bland houses stuck together to maximize the numbers,however,upon closer inspection it’s not really so as all the properties have a unique look or theme to them. Sure,there are quite a few houses but it is a really big tree shaped island and a one of a kind top notch address. Remember though that each of the signature villas comes with a private swimming pool and,best of all,private beach for all you sea lovers. Also keep in mind that the land area for each villa is much larger than the area for the house which is called “built up area”,meaning looks can be deceiving and you actually get more space than you would think. So if you have a plot of 13,000 square feet,and your house takes up 8,000 square feet,you still have a good 5,000 square feet of garden to play around with as you wish with features such as barbeque area,kids play ground and the like.

There is a huge gap between demand and supply of villas on the Dubai property market now,it’s no wonder that the signature villas on the palm have been so popular. They have the name ‘signature’ because owners can choose the fixtures and fittings of the house according to their tastes some of which we will list below to give you examples,and there are so many different exteriors to choose from too,your house is nothing like your next door neighbours’,which of course you would expect when you are paying top dollar like this. A variety of these different styles are available on our site,if you click here.

Dubai Real Estate investment is a difficult decision no matter how much experience you have in the market,no matter where you buy and the best way to get the right property is to find out as much information as you can beforehand with research. Since these signature villas are,for the most part,finished,why not go take a look and judge for yourself with a drive out to the Palm,which can be arranged by us on a VIP tour. Any good real estate broker should always advise you to explore all your options before buying,especially in the Dubai property market because it is so new,and we certainly do!