Property in Dubai
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Dubai was once a small and serene town located on the banks of Dubai Creek in the Middle East. It was the home to mysterious Bedouin traders, children of the desert, and pearl divers who sought out the bounties of the sea in the old fashioned way. Today, Dubai has grown to become one of the foremost trade centres in the world. Famous as a sun-sea-sand and shopping holiday destination, and a cosmopolitan commercial hub, Dubai is a neatly balanced melting pot of traditional Arabic values and tolerant flexibility.
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Currently, there is intense development of luxury residential complexes, designed with an appeal to the Western investor in mind. The World, The Palm, and Jumeriah beach are a tantalising lure, as is the ambition behind planned projects to construct The World’s Tallest Building, The World’s Biggest Shopping Mall, and an indoor ski centre, in the wake of the already successful Burj Al Arab and the Emirates Towers.
On a smaller, but no less tempting scale, the building of apartments in such a hive of leisure and sunshine presents a huge range of opportunities to those wishing to retire and relax abroad, or simply purchase a holiday home. Real estate prices remain modest in spite of prestigious locations and evident luxury. And the possibility of the properties being in oversupply and therefore poor investments is highly unlikely. There are only 15 Free-Zones where developers are allowed to build freehold properties that are then available for sale to non-nationals. Research suggests that over the next 5 years, there will be a shortfall of 40,000 units, leaving many new residents unable to find a property to buy.
In 1995, General Sheikh Mohammed bin Rashid Al Maktoum was appointed as the Crown Prince of Dubai. Sheikh Mohammed is a clear and decisive leader, determined to focus on world class building in Dubai, especially promoting the development of real estate through Emaar Properties (Dubai’s largest real estate company) and Nakheel (a government company). It was in May 2002 however that freehold property in Dubai took a revolutionary upwards turn.
In May 2002, His Highness Sheikh Mohammed decreed that non nationals, that is to say, foreigners, would be allowed to purchase freehold property in Dubai. Foreigners had previously been allowed to buy 99 year leases on property, but this had generated little interest. Allowing foreigners to truly own property in Dubai however lead to a huge boom in the purchasing of residential property. Nakheel and Emaar Properties launched huge developments like The Springs, The Meadows and The Palm Jebel Ali. Other developers followed suit.
To date, the majority of real estate projects in Dubai are concentrated in the area of New Dubai, which extends from Jebel Ali Free Zone to Dubai Internet City. And although many of the projects are glamorous and high profile, there are also many smaller, low rise projects to be found, for example, The Greens and Garden Villas.
With the development of Dubai buzzing along nicely, it can be said that the investment property business is electric. Though the reasons for investment are many, here are some listed below:
1 – The Dubai property market is open to investors of all kinds, from any country in the world. This means that the marketplace has greater funding and liquidity than other areas of investment.
2 – Property the world over remains the best collateral security to have when applying for loans.
3 – Property will always retain a residual value, meaning that even if sale prices fluctuate, the value of the property itself will never become negligible.
4 – Rental income is a stable and simple way to improve cash flow. With so many centres of interest converging in Dubai, from business to leisure, to leisurely business, the demand for rental properties is unlikely to decrease.
5 – In comparison to other places with a similar profile to Dubai, real estate is inexpensive and still shows huge potential for development. From 2002 onwards, property values have risen by more than 20% and this figure is on the increase.
Investment Property in Dubai is clearly more than just a “get rich quick” scheme, but is also a long term savings plan. Dubai is a country with massive development underway, one of the most stable political regimes in the world and huge hydrocarbon reserves. In addition, Dubai has a solid history of protecting all of its residents, whether Dubai national or expatriates, making it an ideal place to invest wisely.