Top 10 Reason of Why Properties in Dubai will continue to Boom

According to the US real estate and Hong Kong property analyzer, Dubai may be a next hot spot for real estate lovers. Here are some quality reasons of why Dubai will continue to boom in next coming years.

1. Dubai mortgage rates are around 8.5 per cent and have yet to adjust to the recent US rate cuts, which they have to do because of the dollar peg to the dirham. Just a couple of years ago local mortgage rates of seven per cent were available. Therefore the downward pressure on the cost of home finance is clear, and if the local mortgage market follows Hong Kong and becomes more competitive, then interest rates could go much lower, making it significantly cheaper to buy than rent. The rates of properties in Dubai are already negative due to high local inflation.

2. Rental yields in the Dubai market of 7-10 per cent are abnormally high by international standards. Rents are unlikely to fall in a booming market, so it is more likely that rising capital values will gradually pressure yields down towards global levels. There is no reason why rental yields should be higher in a booming city like Dubai than in a city where the economic outlook is poorer.

3. The hype about development projects has admittedly duped even this skeptical correspondent over the years. The fact is that far less supply is coming on stream than promised by overenthusiastic developers, due partly to limited supplies of manpower and materials.

4. The prices of accommodation in Dubai are still low in absolute terms in comparison to other global cities with similar salary levels. The HSBC survey of house prices in comparison to per capita GDP put Dubai and Abu Dhabi near the bottom. This is a historic anomaly that will be eliminated by price rises.

5. Six years ago, when Dubai freehold began, it was a market without any formal legislation and regulatory infrastructure. Now it has world-class laws, a state-of-the-art land registry and a strongly-led regulatory authority. Hope has been replaced by experience.

6. The Dubai Financial Market crashed in 2006 pushing local investors into property as an alternative. It recovered in late 2007, but is now again trending downwards with global stocks, and has become highly volatile, shifting over 10 per cent in a day. Expect stock market participants to again seek a more stable alternative.

7. Indeed, the absence of investment alternatives is a major theme for 2008. Global stock markets have had their worst January in history. Recent US interest rate cuts leave deposits paying 2.8 per cent. This makes Dubai real estate look attractive as an alternative. Where else offers such a return?

8. In the same way that the local stock market crash attracted foreign bargain hunters to invest last year, foreign investors in search of yield are also increasingly investing in Dubai real estate. Problems in the UK housing market might be dissuading some buyers, but large numbers of oil-rich Russians, for example, are now buying in Dubai.

9. Dubai still has some undeveloped market niches in Dubai real estate, such as holiday lets and fractional ownership, which are big and even dominant market phenomena in many beach resorts around the world. This source of higher rental yield on property has therefore yet to be fully tapped.

10. The Dubai Government has been the most proactive developer in the emirate, and its recent legislation and regulatory initiatives suggest that this support is not only likely to continue, but will respond appropriately to any adverse market developments.

Buy Your Own Property in Dubai

Dubai is rapidly growing in popularity with British second home purchasers attracted by its lifestyle, cosmopolitan atmosphere and sub-tropical climate.

Dubai City consists of two main areas, Bur Dubai (the older part) and Deira, which faces it across Dubai Creek and is now the centre of the city.

Residential locations traditionally favored by Westerners include the extremely select Jumeirah, which lies on the coast to the southwest of the city centre, and Al-Garhoud, situated on the northeastern side of the creek, near the airport. However, the recent property boom has led to a ripple effect that is enlarging the popular areas. Most residential development is currently happening west of the city, with the majority of foreign and expatriate purchasers concentrated in an area of approximately 25 km2, within easy reach of the beaches and the city-centre facilities.

The types of home favoured by British purchasers are Dubai apartments and villas, often located in secure complexes with communal leisure facilities such as tennis courts, swimming pools and gyms.

Since 2002, when, by royal decree, foreign nationals first became eligible to own property, Dubai has enjoyed a construction boom. New developments, many of them extremely luxurious and featuring the latest in technology, are springing up, particularly in areas popular with expatriates. These include Palm Island, a vast new resort development constructed in the shape of a palm, which projects 5 km into the sea off Jumeirah and extends Dubai\'s coastline by 61 km.

Until 2002, buy Dubai property was restricted by law to citizens of the UAE and other nationals of the Arab Gulf Cooperation Council. Even when this law was reversed, there was, until recently, no federal law that recognised freehold tenure, which meant that the value of Dubai freeholds rested in essence on the country’s international trading credentials and good name rather than on enforceable law.

Foreigners who bought property in Dubai received a deed from the major development companies, which are, effectively, owned and controlled by Dubai’s government and, ultimately, its ruler. Although this state of affairs had little or no significant effect on the burgeoning property market, it was not entirely satisfactory.

In March 2006, the Dubai government passed a long-awaited law allowing foreign freehold ownership of property in the emirate, but only in areas designated by the ruler. Owners are permitted to derive benefit from and to let their properties.

It is generally understood that the freehold as set out under this law is a freehold in the international sense, whereby owners are deemed to have absolute rights in their property.

Some developers are still selling leasehold rather than freehold titles, in which case the title is valid for the period stipulated in the lease agreement.

Because the international property market in Dubai is still in its infancy, there is as yet no formal purchase process. The only piece of paperwork required is a (usually) straightforward sales agreement. Before signing, it is advisable to consult a local lawyer or one familiar with Dubai, since, once signed, the document becomes legally binding.

In the majority of cases, those buy property in Dubai do not incur survey fees. Stamp Duty does not exist. The only significant cost, therefore, is a 1.5 per cent land registry fee, payable on completion.

Because of the absence of a structured purchase process, it is essential to tread warily and deal only with reputable developers and/or agents.

Dubai Real Estate 2012: A Golden Opportunity to Buy Your Property in Dubai

You might have read the reports about Dubai real estate highlighting kick-start to recovery in 2012, but I would say, this is merely a predication based on “the feel good factor” of the property stakeholders. I believe property prices in Dubai have not shown any remarkable recovery in 2011, which reports show. These are just the sellers and owners of the properties who want to derive the prices up through rumours. The fact is property prices in Dubai are still not touching the bottom level but yes, we can say they are near to touch the bottom.

It is expected that the mid-2012 would be the time for Dubai real estate when prices of the properties will touch the bottom level in real. However, despite that recovery cannot be expected even after mid-2012 due to the heavy supply of the residential units expected to add to the market in the year. Some experts are even not predicating much demand as they think people are still hesitant to invest in Dubai properties. In contrast to what the reports highlight, the year 2011 remained another challenging year for Dubai real estate.

On the other hand, the prices of properties in Abu Dhabi are expected to fall by another 15% in the following year. On the other hand, rents in Abu Dhabi are also predicted to fall by another 10% during the year after which the recovery can be expected. Abu Dhabi property prices will continue to decline because the crises hit Abu Dhabi real estate late as compared to Dubai real estate and so this sector will also spring back to life late.

Average prices of the residential units in Dubai like Apartment in Dubai, villas or many other accommodations fell by 12% in Dubai where as in Abu Dhabi the average prices of residential properties dipped by 17% in the previous year. Prices of villas and their rents opposed to apartments showed slight increase in prices. Though overall in 2011, Dubai real estate prices declined but this is evident that the rate of decline slowed down as compared to the rate of decline we noticed in 2009 and 2010. Still if we look at the trend of prices in 2011, we cannot predict quick price recovery in 2012.

Also the prices of rent in Dubai are expected to continue their declining trend in 2012, unless they touch the bottom level. Once they will touch the bottom level in mid 2012, it is not necessary that they will start recovering. They can also remain stagnant unless demand originates and problem of oversupply resolves to push the prices up.

Enjoy This Summer Holiday At Dubai Beach Apartments

Dubai is known as one of the fastest developing countries. This city is not only gaining popularity in trade and commerce but also emerging on the world map as a major tourism destination. The city of Dubai is facing as a result, an onslaught of visitors these days. They include the CEOs, executives, technicians, managers, holidaymakers, rich and famous and almost anybody else that you may think of. This has caused, as a consequence, a great stress on the hotel industry which was catering to most of the rising accommodation demands until recently. The other option, which is now widely being used for lodging is that of hiring privately owned accommodation in Dubai on rent. Experts say they are going to play a significant role in Dubai's tourism in the years to follow.

Memoirs suggest it was the 1960s that turned out to be a turning point in Dubai's quest for wealth. They had an impressive growth rate by then due to the ongoing gold trade, which subsequently got aided because of the discovery of oil. Multinationals began converging at Dubai's seashores with their assets and manpower in a huge fashion, and the sleeping town had suddenly become alive. One can measure the impact of that inflow of men and women from the fact that more than 70 percent of today's population in Dubai is comprised of expatriates. The rush hasn't stopped till this date and the queues for visas continue to spread out.

What leaves one disappointed though, is a lack of inexpensive properties in Dubai that can leave you stranded in Dubai. Barring a few low-priced ones, most of the hotels in Dubai are very expensive. In addition, hotel bookings have to be made in advance, which keeping in mind their expenses can prove out to be a costly affair if the meetings had to be rescheduled or cancelled. This is where privately owned apartments, also called Dubai beach apartments, assume great significance for the visitors. They are found not only to be inexpensive, but also carrying with them extra space, added privacy and more facilities when compared against the hotel accommodation.

A majority of these rentals can be found located in Dubai Marina, Dubai beach and other essential areas of the megapolis. State of the art facilities such as high speed Internet, Cable TV, DVD player, swimming pool, gymnasium etc are offered with each property for hire. Some of Dubai marina apartments could also be found situated right at the beach, which also means they would have breath-taking sea-shore views for you to get delighted on.

There are so many Dubai real estate projects are under develop. The world is watching these developments with interest, and willing to be a part of Dubai's expansion. No doubt, investment, tourism and the number of visitors are going to keep knocking at Dubai's doors. So would the demand for beach apartments do in the years to come now.

Real Estate in Dubai - A Long Term Profitable Investment

Since the Crown Prince of Dubai made changes to his country’s constitution back in 2002 to allow for the foreign freehold ownership of real estate in Dubai, the real estate market in the emirate has gone crazy!

Because there are no such things as taxes payable on income or property transactions in Dubai, and because the popularity of the emirate with hundreds of multinational corporations has created thousands of jobs in Dubai, everyone wants a piece of the property market.

But because demand is so intense and property prices have been shooting sky high, how is it still possible to profit from real estate in Dubai?

Well, you’ve got to know the market to know which developments are in demand from which people, and which people are willing and able to pay top dollar for rental and resale property in Dubai – then you just have to target your property purchase to meet the requirements of your market!

First things first it’s important to know that those buying apartments in Dubai right now will have to wait for up to three years to see their properties completed.  This means that those who have jobs in Dubai and want to relocate to the emirate right now will have to find completed accommodation to rent out.

The demand for completed apartments close to Dubai’s main employment sectors such as Dubai Media City is so intense that annual rental rate increases have been capped by the government who were afraid the increasing prices being demanded would create an unaffordable market place.

Anyone with the funds and the contacts should buy completed apartments in Dubai to let out for the short to medium term.  When the majority of projects currently under construction come to completion within the next three years however, there will be a surfeit of apartment accommodation in Dubai which will restrict property price and Dubai rental price increases naturally.

Those looking for a longer term real estate investment opportunity in Dubai and wishing to get ahead of the curve should be looking at family villa accommodation.  Almost as in demand currently as completed apartments are family villas – but far fewer of these are being constructed and far more of these will likely be required over the longer term.  Furthermore with the creation of Dubailand well underway, villas to rent close to the main attractions of Dubailand for visitors to the theme park will quite possibly become as in demand as Florida villas.

All in all the popularity of Dubai property sector is as intense as ever, but an investor nowadays has to be a little more astute than before if he is to continue profiting for the long term.