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!

Buying A Property In Dubai

There are very few with even a passing interest in property abroad who won’t have read something about Dubai and its unique property market by now. It has only been open to foreign investors since 2003 and freehold ownership is not due to become an option until later this year. Dubai,which is the second largest of seven Emirates forming the United Arab Emirates (UAE),has a population of 1.67 million,80% of which are ex-patriates. As Arab states go,and even by UAE standards,Dubai is probably as liberal,stable and Westernised as they come. There are no problems for women whatever they choose to wear,religious tolerance is the order of the day and drinking of alcohol is not prohibited,although public drunkenness is seriously frowned upon so it may not be the ideal venue for your upcoming stag party.

Judging Dubai’s fledgling property market by the standards of anything else on the planet is a little pointless,it simply isn’t like anywhere else on earth. Parallels may occasionally be drawn with Las Vegas,but the most similarity you’ll likely find is the planned nature of the cities. Dubai is certainly a very contrived city if you look at it in that way,don’t expect to find too much organic and disorganised property growth here,everything is being planned to a tee. It also has a penchant for taking the best and most celebrated design and architectural features of other countries and cultures to use in new and unusual ways. It is possibly not much of an attraction for architectural purists but still quite intriguing as a design ethos.

In terms of financial attractions for both developers and investors they don’t get any stronger than Dubai,tax-free status is as good as it gets. As Ray Norton of Larionovo says,”the tax situation here tends to be a fairly short conversation,there are zero taxes on pretty much everything.” It is easy to gloss over the effect that this has on attracting incoming economic activity until you take a quick look around Europe and see the effect that dropping corporate tax rates to 15% has for a country. This will give you some hint of the attraction to Dubai. Kofi Annan recently went so far as to label Dubai ‘an economic miracle’ so the Emirate obviously has friends in high places. It is essentially a tax-free zone in its entirety and this fact has not been lost on the corporations of the world. Of course an Irish investor will still be taxed in Ireland on all their overseas income,but you can’t blame Dubai for this.

One of the main drags on this market to date has been the inherent difficulty in arranging mortgage finance. This is rapidly changing with the impending introduction of freehold laws and the chances are that freer availability of mortgaging will continue to drive price inflation in the region for the foreseeable future as will the nature of some of the more mind-boggling schemes being presented to investors.

One of the things which most worries many people about the entirety of the United Arab Emirates is not the fact that there is any intrinsic political instability,there has been no history of this in the region since transfer of power from the British in 1971,or even before that time. It is really more a question of some of the entities surrounding the Emirates not having a similar reputation. It can be difficult to convince those unfamiliar with the area how little this has affected it up to this point. There is obviously nothing to say that some undesirable won’t decide to focus the region because of its liberal Westernised policies or rich oil reserves,based mostly in the neighbouring Emirate of Abu Dhabi,but advocates claim you may very well be in more danger located anywhere near Shannon and thus tend to ignore this possibility.

Another argument against investment here is the lack of democratic political structures. The Maktoum family have been very benevolent rulers but not everyone in Dubai agrees with their vision for the future. The argument for a focussed single ruling entity can be very visibly seen in the ease and speed with which huge new projects can be vetted and actioned,this simply doesn’t happen in the democratic world. The flip side of this coin becomes more obvious if you don’t agree with the actions taken by this unchallengeable authority. Not everyone is comfortable with such irrevocable powers but many country’s experiences with democracy and its ability to cater for the common good haven’t exactly been riveting so I guess you could argue either way.

Spiralling rents for homes in Dubai is obviously seen as a boon for property investors but it should not yet be viewed as the norm for the market as very little of the planned property in the Emirate has actually been built yet. As it stands,low-paid workers are already priced out of the local rental market,where rates increased by around 40% in 2005. The rate increases were so large that the governing Maktoum family intervened to cap rising rental rates. This highlights something which may become more of a problem with time. While Dubai is witnessing a construction boom,the trend is almost completely toward luxury apartments and villas,leaving little accommodation for unskilled and semi-skilled workers,mainly from India,Pakistan and the Philippines. Even if the Emirate succeeds in its attempts to make this the Mecca for all tourist related traffic in this region it will be necessary to accommodate such workers but there don’t currently seem to be any incentives to supply product for this significant market sector.

Traffic is also currently a huge problem in the city with traffic jams sprouting at just a minute’s notice,and this is before most of the property has even been built. You would shiver to think what levels of traffic will be present when all the building is completed. The lack of any reasonable public transport system doesn’t help much but the plans to build a monorail system to alleviate the problem will surely bring smiles to the faces of all Simpsons fans.

Unlike most world cities where property is built to service a growing need,Dubai is entirely the reverse,which is what makes it so hard to pin down. The long term plans laid out for the city by the all-powerful,and highly revered,Maktoum family drive property development. This in turn invites investors to buy into a market which has basically been engineered from nothing. It is this flagrant invitation to investors,normally a very bad sign of a market,which bothers most people about Dubai. Because of the unique way in which the Emirate has chosen to populate its territory it is difficult to see how else it can find buyers for the vast amounts of property it intends to build. Ray Norton of Larionovo is quick to point out,however,that there are more than 100,000 expats per quarter applying for visas to enter the country pushing demand for property here along with the huge investor rush into the market. It still has to be acknowledged that the very new and unique nature of this market has led to near mass hysteria on the release of new projects with some selling out in hours.

This obviously leads to spiralling prices and the scenario of properties changing hands many times before they are even built. Such activities have given the Dubai property market a bad name in certain sectors but others view it as an open invitation to invest and prosper. Whether Dubai suits you as an international property buyer will depend entirely on whether you feel the plans for the city into the future are visionary or an ill-judged attempt to fiddle with the mechanics of property based market economics. It is far too early to say which side will be proven correct but it will be very interesting to watch this new and unique market unfold.

Advantages of Property Investment in Dubai

One of the reasons why Dubai continues to grow and thrive is that it is such an amazing tourist destination for the majority of European travellers. The impressive five year plan for growth and development initiated by the Dubai government makes Dubai quite attractive to investors worldwide. At the same time financing in a foreign country can be tricky at times. But Dubai is a good arena to seek financing because of the foresight of the Vice President and Prime Minister of Dubai,His Highness Sheik Mohammed Bin Rashid Al Maktoum in creating a secure financial law that protects both borrower and lender from all sorts of malevolence.

Investors who wish to invest in Dubai should choose well-backed planned properties that go along with the government’s scheme for mass development and beautification of the city to off plan properties that provide a more affordable means of entering the real estate market in Dubai. Applying for financing on Dubai properties can be done directly through their infrastructure for quick,easy and secure transactions that will get you into the action in the most competent manner possible.

One of the most important advantages of financing Dubai property is that investors are never subjected to some of the hidden fees that often complicate real estate transactions in other parts of the world. Moreover tax advantages are incredible when financing Dubai property as there are no taxes on capital gain or income taxes assessed on residential or commercial rental properties in the UAE.

The most important reason is to invest in Dubai is financial security. At a time when real estate,housing,and mortgages have lost their overall future value that they once held,this is the one spot in the world where owning land remains a secure and clever investment.