Predicting the Dubai property market

16 November, 2007
Here's an interesting excerpt from an article by Ryan Mahoney of The Gulf News, published today.

If I had a dirham for every time I was asked what is going to happen to property prices in this market I would have built up a tidy sum by now! The truth of the matter is that nobody has the definitive answer, we can debate for hours on end and come up with a likely scenario, but without a crystal ball it's tricky. It is possible however, to look to other similar markets and consider the natural cycle of real estate for guidance so for what its worth, here are my thoughts on one of the most frequently asked questions in Dubai.

There are many factors that affect the price of property but the biggest single factor that has influenced the Dubai market over recent times has been supply and demand. At a time when the majority of units are still under construction, we have seen an incredible level of demand for all types of properties; from apartments to villas and warehouses to office towers.

When the freehold property law was introduced, the Dubai property boom was born. Attractive launch prices along with unique and aspirational projects such as The Palm Jumeirah and The World made Dubai an investor's paradise. Speculators looked for quick returns by capitalising on an untapped market, expatriates bought somewhere to live and holidaymakers looked to these shores for a second home.

Ever since, demand has continued to increase, pushing prices up with it, providing investors with fantastic returns, both in terms of capital growth and leasing revenue. Such increases have spurred more people to buy here, creating further demand and driving prices up.

The massive influx of people, driven by Dubai's positioning as a major business hub for the region and a luxury holiday destination, has created an insatiable demand for property. All new residents need a place to stay and in the same way, multinationals need business premises. The pace of growth means there hasn't been enough property to go around and therefore, any completed property available for sale or lease has been at a premium rate.

The second biggest factor affecting the supply shortfall, and therefore prices, is delivery delays. In many cases, construction has taken far longer than was ever expected, adding further pressure to an already strained market.

So getting back to where I started; what does the future hold? Dubai is currently a hive of construction activity and as each development reaches completion, more products become available. However, as these projects are delivered, there will, of course, be more and more people relocating to Dubai for work, the number of which will affect how long it takes for supply to even out. The nature of real estate suggests that at this point we could see a levelling of prices.

Ultimately though, I don't see anything drastic happening to prices. Dubai still has a lot to offer buyers. With increased regulations adding further credibility to the market, and the current strength of some foreign currencies making Dubai property more affordable, as well as some exciting new projects underway, demand should remain a firm favourite with buyers for some time to come.

Finding the right property

24 October, 2007

Looking for property on the Dubai real estate market can be a daunting task, there is just so much choice and variety. Most overseas property investors are only familiar with the largest of property developments such as the Burj Dubai or the Palm Trilogy, yet there are so many more that can also be more affordable simply because they haven't received the same level of hype. Thats why its important to seek expert local advice when considering investments in Dubai.

The most important thing that property buyers need to know is what exactly is available on the market. Besides the most commercial of projects, there are also a good variety of projects that cater to property investors that want something more affordable. Whatever your taste, there really is property to suit every need, from small apartments to penthouses, comfortable villas to luxury mansions.

Property prices stretch across quite a large range, with studio apartments available from around £50,000 to £140,000. Larger apartments can range up to the £700,000 mark and for villas, as they tend to be in short supply, they can range from around £300,000 for a smaller villa or town house, upwards beyond £700,000 and even in some cases beyond £1.5m for exclusive luxury villas and mansions. At the top end are luxury custom personalized penthouses which stretch all the way to £7m.

The prices of property really depends on the amount of square footage, location, the type of project and the number of units available. Fortunately, the sheer variety of projects allow you to pick and choose the property that is right for you

We work with the region's largest independent developer, and have access to an unrivalled variety of property in the region - residential, offices, and retail - and with project ranging from around £50,000 up to £7m there is something to suit every investors budget.

See our property lists here online or contact us now to speak directly to an expert.
Residential
Office
Retail

Dubai property boom to continue

October 24th, 2007

The property boom in Dubai will continue and is set to expand further across the UAE, says Khaleej Times.

This according to AME Info which studied the attitude of property buyers in the UAE in a survey entitled "Buying Property in the UAE".

"The AME Info Buying Property in the UAE survey, part of a wider report on property in the region, found that Dubai is still the emirate of choice for many buyers," said the online news firm's editorial director Rob Jones. "But as prices skyrocket, it is having a ripple effect that is reaching other emirates."

He added: "Overall the survey show there is a thirst to buy in the UAE — many people see it as a good investment and want to get in before prices go higher to escape the annual cycle of rental increases."


The survey said that 84 per cent of the more than 1,300 respondents plan to buy property in Dubai. It stressed that almost half of those wanting to own property plan to live in it, showing interests to stay longer in the UAE.

Annual property prices to increase 25 per cent

October 19th, 2007

Annual property prices in Dubai are set to be up by 25% over the next ten years said a senior official of a Dubai based developer. He also predicted that 45,000 additional units of property are needed per year in Dubai until 2020.

Announcing it at Cityscape, a trade show for institutional investors in the real estate industry, the developer cited Dubai’s growing population and steady economic growth as the reason.

Property boom set to expand throughout the UAE

October 18th, 2007

AME Info, the leading provider of online business news in the Middle East, today published the results of a new survey, 'Buying Property in the UAE', profiling the attitudes of property buyers throughout the UAE.

The survey conducted with over 1,300 respondents who use the free AME Info service, reported that the Dubai property boom is on course to continue and is set to expand further across the Emirates, with purchasers looking to Sharjah and Ajman as destinations of choice.

The survey also reveals that of the 84% of respondents who plan to buy property in Dubai, almost half plan to live in the property, demonstrating a long term commitment to the UAE. Of the 60% of the respondents who said they were planning to buy in the UAE, 39% of these said they would buy off plan as it was a cheaper option - seven out of ten respondents (70%) were of the opinion that property prices were too high in the region.

RETAIL PROPERTIES

EMIRATES GARDENS
A stunning sequel to a sensational investment and beautiful living. Emirates Gardens 2. High on quality yet low on investment. The beautiful development is a delightful combination of 3 buildings. Maple, Magnolia and Mulberry - each ground plus 4-storeys. A warm, friendly, peaceful, secure neighbourhood with great retail opportunity. Located in Jumeirah Village South near Dubai Media City, Dubai Internet City and the Jebel Ali Free zones.

Type: Retail space
Location: Jumeirah Village (South), Dubai
Completion: Sep-08
Accommodation: 500 - 780 sqft.
Prices: ~ 1,000,000 - 1,600,000 (AED), 140,000 - 230,000 (GBP)

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THE PIAZZA - Retail
A unique and extraordinary design that embraces different color schemes and material-mix to create a distinct landmark. Located in Fox Hills - Lusail, The Piazza is a high-class residential and retail complex. A beautiful charming ambience conceptualized to catch the eye from far. A stunning sight to behold from close. Creating the charisma of a picture-perfect lifestyle.

Type: Retail space
Location: Qatar-Lusial, Foxhill, Doha
Completion: TBC
Accommodation: 1100 - 1600 sqft
Prices: ~ 2,200,000 - 3,100,000 (AED), 310,000 - 440,000 (GBP)

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SMART HEIGHTS
In today's era of blue-chip professionalism, jet-set deadlines and rising overheads, there is simply nothing better than Smart Office Space to ensure high returns on per employee investment. And you can be rest assured of dramatic results in work efficiency, in almost every area of your business activities.
Little wonder then the corporate world is moving their offices and their staff to Smart Office Space. Damac Properties has been at the forefront of introducing path-breaking Smart Technology in residential projects and now in office space.
Freehold smart office space in a freezone is a smart investment. Owning an office in the heart of Technology & Media Freezone(TECOM), Dubai also gives your business the competitive edge, reduces your overheads and increases productivity.
A hub of a vibrant business community Smart Heights gives you the full range of business opportunities to entrepreneurs as well as regional, national and international companies.

Type: Retail space
Location: TECOM, Dubai
Completion: Nov-08
Accommodation: 1800 - 2300 sqft. (retail). 6500 sqft. (restaurant). 24 floors
Prices: ~ 4,500,000 - 5,800,000 (AED) (retail) and~ 19,600,000 (AED) (restaurant), 640,000 - 830,000 (retail) and 2,800,000 (restaurant) (GBP)

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PARK TOWER
Located in the heart of the region's financial hub, this shopping paradise is designed to become the most sought after destination of high Net-worth customers from in and outside Dubai. And also the business class who work and live here.
The two-tower masterpiece is inspired by the evolution of Dubai and the undulating forms of the desert. Residents can enjoy an ultra modern luxurious lifestyle with panoramic views of the designer city.
Unwind anywhere and anytime, with world-class recreational facilities, whether you'd like to wander into a distant dream, attend to your mind's needs or simply experience a little peace and tranquility; Park Towers is the place to be.

Type: Office
Location: Financial centre
Completion: TBC
Accommodation: 2400 - 5800 sqft.
Prices: ~ 6,600,000 - 23,000,000 (AED), 940,000 - 3,300,000 (GBP)

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CAPITAL BAY

Type: Retail space
Location: Business Bay, Dubai
Completion: TBC
Accommodation: 1100 - 2200 sqft.
Prices: ~ 1,900,000 - 3,700,000 (AED), 270,000 - 530,000 (GBP)

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Please note: We do our best to ensure that price guides are accurate, but prices can change. Therefore prices shown are for guidance only. Equivalents shown in £ (GBP) are calculated using an approximated exchange rate, and are also for guidance only. Exchange rates are always subject to fluctuation. We will be happy to confirm prices on request.

BENEFITS OF DUBAI PROPERTIY INVESTMENTS

There are many benefits of investing in residential or commercial property in Dubai. Dubai is perhaps the most vibrant developing city in the world, a fact recognised by private and institutional investors, as well as the corporate world.

Eight out of the world's largest companies now have major offices in the city, and nearly 400 of the Fortune 500 companies are represented there too.

The Emirates is rich with the proceeds of oil production which has formed the backbone of the economy for many years, but the government has the foresight to know that this will not always be the case and is investing heavily in diversifying its own economy. Indeed it has set targets concerning its GDP (gross domestic produce), and stated that by 2010 only 10% of its GDP will be from the oil industry. Such has been its committment that this target was smashed four years early, in 2006. Growth in Dubai's leisure, tourism and commercial sectors has been so swift that oil represented only 3% of the GDP in 2006.

Some other facts and figures about Dubai:
- 0% income tax, 0% capital gains tax
- 0% corporate tax
- No foreign exchange controls
- No trade barriers or quotas
- Stable, freely convertible currency pegged to the dollar

Some facts and figures about the developers we represent:
- $20bn conglomerate with a diversified range of businesses (including property development)
- Employs over 8000 people across operations in 20 countries
- Its property development business is the Middle East's largest private master developer, and one of UAE's largest private businesses
- 4200 million sq ft of luxury and 9500 customers, across developments in 6 countries
- 16 offices, 68 projects

Some investment and return figures:
Lake Terrace (2003 - now) - 63% annual appreciation, 190% total appreciation
Lake View (2004 - now) - 56% annual appreciation, 111% total appreciation
Lago Vista (2005 - now) - 34.5% annual appreciation
Marina Terrace, launched in 2003, investors have made 228% total appreciation plus 23% rental yields
Waves, launched in 2002, investors have returned 213% appreciation and 19% rental yields

The pros of Residential v's Commercial:
Residential - strong capital growth, good rental yields, taper relief 40% after 10 years
Commercial - stronger capital growth, better rental yields, taper relief 75% after 2 years