Dubai Real Estate Investment Opportunities

Why Invest in Dubai?

            Dubai is rapidly becoming the shining star of the Middle East. Dubai is one of the seven United Arab Emirates, and it’s been noted as the fastest-growing city on the planet. Dubai lies on the southeastern shore of the Persian Gulf, strategically located at the cross roads of Europe, Africa, the Middle East and Asia. This makes it a gateway to over 1.5 billion consumers.
            The growth of Dubai is attributed to the fact that in May 2002, Sheik Mohammed bin Rashid al-Maktoum, in an effort to reduce Dubai’s economic dependence on oil, issued a decree that for the first time allowed foreigners to buy and sell property.
            Investors from all over the world poured in, recognizing the potential of Dubai with its stable economy, secure political scene, zero property and income tax, and an unmatched standard of living. The result? Today Dubai is the number one emerging market. An estimated $80 billion of real-estate projects are now underway in Dubai.
            Buying investment property in Dubai is considered one of the best real estate investments that you can make. One reason that investing in Dubai is a good idea is that the area is growing so quickly and has also been experiencing a monumental real estate boom since early 2004. This boom has been happening for some time and there is no sign of it slowing down. Real estate analysts believe that there is no issue with inflation, so the value of your investment property in Dubai is real, meaning you can sell your property for what it is worth. This is not always so with Western investment property!

Property is cheap on an International level
Property is cheap in absolute and relative terms. For example at this moment, an average villa will cost around $1,000 per square meter in comparison to London where it would cost $5,000 per square meter. There are very few modern cities in the world where high-standard property is priced so low.

Foreign Ownership
Dubai is in the process of creating an international property market from scratch, with foreign ownership of freehold only introduced last year. Buyers are given an exceptionally good deal to encourage them to be pioneers.

Shortage of supply
The Dubai Government is working hard to prevent a shortage of supply and is giving land to developers as an incentive. Massive supply today in Dubai may be nothing compared with demand in a few years time. Dubai is growing its GDP by 7-8% a year and shows no sign of slowing down.

Rising Building Costs
A fundamental influence on property prices is raising building costs. The low US dollar is pushing up the cost of materials from Europe, which is pushing up energy prices.

Tax Free Income
Dubai is a city where many people earn high tax-free salaries and are in a position to support higher house prices. This is a city with a 20-year track record of strong economic growth and will continue to attract foreign and regional inward investment.

International Business Center
Long recognized as the leading regional trading hub of the Middle East, Dubai has now become an international business and re-export center. The country has developed rapidly over the past 10 years and has transformed itself from an oil dependent regional core into a highly diversified international business center of global significance.

Tourism
Over 3.4 million tourists visited Dubai in 2001 and this figure is expected to grow to in excess of 6.0 million by 2010. With its central location, Dubai is rapidly becoming the premier tourist destination of the region. Over the past decade, the number of visitors to Dubai has grown from 1.08 million to 5.4 million, representing an annual growth of 16%. This growth rate is more than triple the world tourism growth rate over the same period. In fact, the last five years alone witnessed a 54% growth in the numbers of tourists visiting Dubai. Forecasting 200,000 visitors a day, Dubai is being designed to attract and accommodate 15 million visitors a year from 2010 onwards.

Returns for Investors
Prices for properties in Dubai are appreciating steadily at the rate of 10% - 15% per year.

Attractive Currency Rates
The local currency, AED (Dirham) is fixed with the US dollar (3.675 AED: $1). The recent strength of the pound against the dollar means by investing now, investors are achieving a 10% - 15% ready equity compared to the same prices a year ago.

Many of the driving factors behind investment in Dubai Property are as follows:

The population is set to rise from 1.2 million to 4 million. Traffic into Dubai is set to rise from 5 million to 15 million.
It is halfway between the financial capitals of London and Singapore
A billion and a half people are within a 3 hr flight
All master planning is Government controlled so the demand to supply ratio is managed, thus maintaining strong growth & returns.
No capital gains or income tax.
Wide range of properties available
The quality of build is high.
No legal fees are required, although advice is recommended.
The buying process is simple, with no national registration required.
The average price of a studio apartment in Dubai Marina is around £140 per sq ft, in comparison to £316 per sq ft in Salford Quays, Manchester England.
Capital appreciation has risen between 15% - 25% annually.
High rental yields on completed properties.
With the purchase of property you are granted the right to apply for residency visas.

Here are a few of the accomplishments and projects underway that are helping to put Dubai city on the map:

Burj Al-Arab - The only seven-star hotel in the world
Burj Dubai - Tallest tower in the world - sold 1.1 billion (US) in 2 nights
Mall of Arabia - Largest shopping mall in the world
Palms Jebel Ali - Two largest manmade islands, with resorts and entertainment venues, just off the Dubai coast - sold out in less than 1 week
Dubailand – A collection of six ultra-modern theme parks including 45 mega-projects and 200 entertainment projects in development designed to create a tourism venue nearly three times the size of Walt Disney World Resort in Orlando.
Jebel Ali Port - Largest manmade port in the world
Sky-walk - Longest foot bridge in the world
World-class Sporting Events - Dubai World Cup (the world's richest horse race), Dubai Desert Classic (Golf) and Dubai Rugby Sevens
Dubai International Financial Centre (DIFC) - Proposed financial hub for the entire Middle East
Dubai's Airport - Expansion underway to be able to handle 45 million passengers a year by 2018.
Tax Incentives - 100% tax-free business environment