(Published by DubaiLime September 3rd, 2007 in People, Living)The Dubai property market is still booming in the UAE. With rental prices increasing month on month, more and more residents and businesses are now looking to get on the Dubai housing ladder. Commercial property sales (such as shops, offices and hospitality ventures) have also shown promising growth and good returns over the past few years.
For businesses, buying a property can be a healthy investment and for investors, a great way to diversify their investment portfolio.
Investors outside the UAE have experienced home market slumps - in many cases the housing and property boom has leveled off and the largest returns already discovered.
Dubai is a very attractive investment hub. It’s done a fantastic job of marketing itself to the rest of the world and as a consequence Dubai has attracted a lot of attention to investors across the world.
The potential for commercial and residential property is potentially enormous. Dubai is in a great location, has swift and numerous flight connections and a very favorable tax system. Its relaxed policy to western cultures, the influx of European, Australian and American universities and its addiction to luxurious standards, unrivaled hospitality and high class living also makes Dubai an enjoyable place to live. These ingredients have meant the population has and will continue to increase rapidly.
Dubai Property prices
Residential and commercial property prices have increased year on year since the launch of new laws allowing the sale of freehold properties to overseas investors but despite the price increase, there has been no apparent let up in Dubai property sales. Recent studies suggest that the demand for residential and commercial property is likely to continue for the foreseeable future.
Capital gains and income yields are higher than many property markets. Returns are still high.
Current rumors question the unfathomable amount of commercial and residential building currently taking place in Dubai and ask whether supply could perhaps be outstripping demand. However, according to a Dubai property agent, supply is still not keeping up with demand.
On bedroom flats and Studios are on high demand due to the number of ex-patriots entering the country. Office space is hard to come by, especially in the free zones and shop space is bound to be needed for the amount of residential build going on. With rentals prices still rising, investors can look to good returns on rental income as well as a capital appreciation.
In recent years, prices have increased by as much as 25 per cent per annum, while remaining low by UK standards, and Dubai has become an international property hotspot. The consequent surge in new residential developments has fuelled fears of a property bubble, but demand is still exceeding supply and is not expected to slow in the short term.
Other reasons for investing in commercial property in Dubai include the continual expansion of Dubai as a services hub and in particular a financial services hub. More and more international commercial companies are moving into Dubai. By doing this they are showing their commitment to the region- a strong indication this Emirate is going from strength to strength, providing good returns all round and is expected to continue to do so.
Cost of commercial property in Dubai is still low when compared to international standards and returns are expected to be higher than the majority of countries in years to come. The reasoning behind such is perhaps foreign investors placing money into such properties, which will push the value of the real estate to international standards.
There is currently a Disneyland attraction being built in Dubai. This would result in an increase in tourist visitors to Dubai and if your property is aptly situated, there is a chance you will be able to rent your property to holiday makers. Short term rentals in general provide much higher yields when compared to long term tenants. Real estate companies double up as property mangers so these companies will be able to handle most of the maintenance and payment collections on your behalf.
The demand for commercial properties around the various developments will increase and companies scramble for the high returns expected from the tourist dollar.
