Dubai Property Markets Future Perspectives

By: Marta Thompson

Overseas property is becoming an increasingly popular investment choice, but buying investment property abroad can be a real challenge. When it comes to buying in emerging markets the challenge can often be compounded due to a lack of available information. This article can help you to obtain the latest and correct information and advice that is needed when buying overseas property.
If you are looking to make some real estate investments you might want to look into purchasing Dubai property. However make sure that you do not make a decision that you'll regret later. Many people make rushed decisions, not taking enough precautions or not investigating fully other alternatives, disadvantages or pitfalls.
Look carefully which advantages and disadvantages Dubai property investment has.

1.Advantages of Investment in Dubai Property:

Ã?â‚?? 365 days of sunshine a year.
Ã?â‚?? World Class Sporting Events.
Ã?â‚?? World's only 7* Hotel.
Ã?â‚?? Dubai land.
Ã?â‚?? Regional base for multinational companies.
Ã?â‚?? More than US $50 Billion to be invested by 2010.
Ã?â‚?? Tax-Free Lifestyle.
Ã?â‚?? Duty Free Shopping.
Ã?â‚?? 15 Free-Zones.
Ã?â‚?? The supply of Dubai property is not keeping up with demand.
Ã?â‚?? Booming Dubai property market in this cosmopolitan city ensures Dubai is one of the most important real estate hubs in the world.
Ã?â‚?? Record low interest rates and dismal stock markets are goods news for realtors; the Dubai Government is behind the real estate boom, and has secondary motives such as attracting wealthy immigrants to the city. As a results villas and apartments are being sold very cheaply.
Ã?â‚?? One way to judge if real estate is cheap is to look at the yield or rental return. In this city a basic yield of 10% on residential Dubai property compares with a 6.5% local mortgage rate. In London 3% to 4% would be considered a good yield today so 10% implies a considerable under valuation of property.

Disadvantages:

?Geopolitical tensions in the region (important factor but look at the advantages above)
?Research reports are saying supply will catch with the demand soon like in 2010.
Based on assumptions and one of the assumptions that I don't agree with is that supply demand curves are based on 2.5 people per flat and I think it should be +4 people in a flat. Many people can't afford to stay without sharing especially new comers who start with low salary... Anyway which means demand will be equal to the supply much sooner than 2010 lets say by end of 2008 which means you have to adjust your rental expectations by as much as 20% more flats to rent less people to rent them only cheaper ones will go.
?Prices might correct a little bit anytime soon lets say by 20%max
?Severe weather conditions high salt content in groundwater sandy soil which makes most buildings require piles under foundations and they have a life span
?Many are afraid to cash in on Dubai property because they have watched real estate booms come and go in the United States and elsewhere, and the bubble always busts. However there is no indication that the bubble will bust and that Dubai property has been valued unfairly. The building of Dubai property is a priority of the emirates government, so the growing property values seem to have no limit.
After thorough research I can make conclusion that Dubai property has been and continues to be a hot topic among investors because there seems to be no limit as to what can be achieved from an architectural standpoint as well as how much one can profit from the real estate. Dubai and the UAE's future is focused upon creating a business and tourism environment second to none which centers around incoming foreign investment from commercial institutions and individual investors.

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