Investing in Dubai Property Market

Dubai is certainly a dynamic property market. Villas and townhouses are sold within a very short period of time. Developers offer rebates to investors who invest heavily and if you buy an entire floor of a building, chances are there that you will be offered discounts that will position you to achieve windfall capital gains over a period of time.

However, there are some regulations; especially if you are a non resident. The first and foremost is that you must have resident visa to buy property in Dubai. But those who have the resident visa with themselves or are the residents of Emirates, are sitting on a stack of opportunities.

With its ever-flourishing economy and increasing headcount, residential properties in Dubai enjoy astonishing volume of demand. According to the estimates of Emaar, a Dubai-based developer, there are about 20 residential projects that are open for sale in Dubai, currently.

Most of the property projects are located within the radius of 20 kms of the central business district where the Sheikh Zayed Highway runs alongside the emerging Burj Dubai district. Projects near the location of ‘Dubai International Financial City’ are the most sought-after ones that have the potential to deliver returns to the tune of 50-200 per cent in the next three years.

For investors looking for regular income in the form of monthly rental, furnished apartments offer superior rate of return on investment. Unfurnished properties in Dubai, on the other hand, are preferred by mostly the non residents who move into the city just recently.

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Options Galore in Dubai Property

Dubai property scene is constantly under a state of flux. More and more people in Dubai property market are opting for their own roof over their heads, instead of renting property in Dubai. Overseas visitors are getting to experience the cosmopolitan culture here and are investing in Dubai property.

Why is Dubai property selling like hot cakes? Quality lifestyle is one reason. And secondly, there is an abundance of options in Dubai property! It offers anything from studio apartments and individual villas to town houses and condominiums.

A condominium or condo for short is a property type with individually owned units in a multi-unit development. In addition to these privately owned apartments, the common areas such as foyers, recreational areas and lawns are jointly owned by all the residents of the development. Dubai property market is flooded with condo options, more often condo hotels. Individual owners can put their unit to personal use or pool it with the hotel’s management team for rental. Condo hotels are one of the prominent Dubai property options available at present. They have close access to recreational facilities, theme parks, casinos, etc. These hotels have the potential to generate high rental yields for the owner in the Dubai property market. Rentals of up to 8 percent per year are guaranteed.

An independent apartment in Dubai property market can range between 500,000 to 12,000,000 AED*. A studio apartment is a bachelor apartment with one large hall which is used as a living room, dining room and bedroom all rolled in one. Even the kitchen is usually a part of this room and the apartment is complete with a smaller room as a bathroom. The minimum price of a studio apartment in Dubai property market is 275,000 AED. It can go up to 500,000 AED. At the same time, a studio apartment in Dubai can be rented for about 400 AED a day.

A villa is an upper class house which has its own compound. It is usually located in a countryside or sub-urban locality. The price of a villa starts at about 1,500,000 AED and can soar up to 20,000,000 AED in Dubai property market, depending upon the location and property area. Palm Islands, Dubai Land, Meadows and Arabian Ranches are some of the premium villa locations in the Dubai property matrix.

A townhouse is an independent house usually in the urban area. There can be a group of town houses in a community. Each town house is individually owned by the buyer who also owns the land on which the house has been built. Buying a town house property in Dubai provides the luxury of having access to swimming pools, golf courses, private beaches and lush gardens. Dubai property industry offers these at a starting price of around 900,000 AED.

Overseas investors, both individual and commercial, look upon Dubai property as a site to extend their investment portfolios with more promising returns than their respective home countries.

*AED: Emirati Dirham; 1 US Dollar = 3.67370 AED; 1 AED = Rs.11.10112

Property Buying Process in Dubai

Due to the wise planning by the Dubai leadership, the property buying process in Dubai has been incredibly lucrative. With development areas for the highest residential tower and largest mall in the world, Dubai is experiencing a booming real estate market. Owing to strong fundamental demographics, Dubai is enjoying a vibrant real estate market boom. In Dubai, real estate prices have risen due to high demand and supply shortages.

The Dubai government has managed this economic boom with a push-pull management. The Crown Prince relaxed foreign ownership regulations in the year 2002, thereby allowing for 100% foreign control of “freehold” property which could be sold, rented or leased. As a result of this move international investment has flowed into Dubai. Other offers like no capital gains tax in the UAE and no stamp duty on UAE real estate has all induced more real estate property investment in Dubai.

The Dubai Strategic Plan for 2015 is an ambitious plan that targets high GDP growth rates with an increasingly skilled workforce, through extensive investment in financial, construction and tourist sectors. While other regions in the world are experiencing credit crunches due to mismanagement, Dubai has a credit surplus and is an emerging international financial centre.

The UAE property market has options available for commercial properties, short-term rental properties and office spaces. It also has residential properties that include apartments, luxury villas and mixed-use gated communities. These are also waterfront properties, beach resorts and penthouses. The opportunity is awesome as many real estate developments have extensive waiting list and the Dubai rental property offers high yields of around 12 - 15% per annum.

Property Scenario in Dubai

Property in Dubai is a major investment arena for investors worldwide. The investment pours in not only from commercial companies but also from individuals abroad. In the last five years, the real estate sector has seen a marked boost in investments. This in turn has increased the supply of property in Dubai. In fact, both the processes are influenced by and in turn affect each other. In the coming years, this trend is expected to bring about an increased demand for purchasing residential and commercial units. One of the major consequences of this would be soaring property prices. Although many analysts expect that the supply would exceed demand in near future, this is believed to be an impending possibility only for the high income group.

The process of buying real estate in Dubai is simple and hassle free. Property in Dubai requires no national registration. Usually, one has to pay some amount as booking or reservation deposit. Then, there is a deferred payment schedule wherein the remaining payment is divided into installments spread over the construction period. Units are financed to non-UAE residents only on certain ventures. The interest rates of properties range between 6 to 9 percent and the term usually lasts for 15 years. Upon non-UAE transactions, one can even obtain freehold rights.

There are factors that make investing in Dubai realty a profitable exercise. The capital gains tax and rental income tax are 0 percent. Secondly, the demand-supply ratio is carefully monitored and controlled by the government so that the properties account for strong growth rate and returns. Last year, the UAE economy witnessed a 26 percent nominal GDP growth.

Moreover, although legal advice is required to purchase property units in Dubai, there is no fee to be paid for the same. There is no tax levied on the properties. But there is a land registration tax which is paid to the government on completion of the project involved. This amounts to 1.5 to 2 percent of the price. However, if the contract is resold before completion, a transfer fee ranging between 1 to 7 percent is paid to the developer. To add to the benefits of purchasing Dubai real estate, the government provides resident visas on non-UAE investments.

Even the mortgage market has developed quite rapidly over the last few years. The emergence of HSBC as an international mortgage provider for property in Dubai has changed the scenario for ever after. The mortgage rates offered by the bank on are highly competitive and flexible.

In 2002, His Highness Sheikh Mohammed bin Rashid Al Maktoum, with a vision to transform Dubai into a global city, had decided to encourage international investors towards purchasing more properties. This dream will certainly materialize in the years to come.

So Why Invest In Dubai Property?

Dubai is now being recognized as the business, leisure and sporting capital of the Middle East. Overseas property buyers and its millions of visitors each year are attracted to the liberal attitude and relaxed environment. Live and let live is the feel of Dubai where the majority of the 1.5 million populations are in fact expatriates.

Doing business in Dubai is surprisingly easy with minimal bureaucracy and a can do attitude that makes Dubai an attractive place for big business. The country wants inward investment and to increase its population. Politically stability and low crime are also one of the features of Dubai. International visitors feel safe and the presence of heavily armed police and army is not present in Dubai. How this state has achieved such an oasis of tranquility is remarkable. The ruling Royal family are admired and spoken highly by the people of Dubai. It may be the lack of political interventions or political parties in Dubai that may indeed make this place harmony.

The climate in Dubai is sub tropical and arid rain is seen during the winter months of December to March. The average temperature is between 10-30 degrees Celsius and can reach up to 48 degrees in July and August.

International investors buying property in Dubai include Russian, British, Indian and Pakistani investors. The French are now seeing the potential of this region and I anticipate will also become one of the major investors in this region.

Investors from the Middle East and United Arab Emirates are amongst the earliest investors. Buying property in Dubai as an overseas buyer is quite straightforward. The majority of real estate in Dubai is available off plan or pre construction. Typically as property developers launch a project there is flurry of activity amongst investors. Seasoned investors have speculated about the bubble bursting in the Dubai real estate market.

Oversupply has led to concerns by overseas property investors. In 2010 the number of homes in the region is set to double to 530,000. The commercial sector is also expanding at a rapid rate with office space set to triple, so who is going to buy all this real estate? Dubai Property Executives explain how Dubai is as great place to invest.

Nakheel is a government backed property developer Chief Executive Chris O’Donnell ‘People do get a little concerned about Dubai, thinking we are just building and hoping we will sell the product on completion. But we sell product prior to starting construction. Everything you see at Palm Jumeriah has been sold” Property Developers Dubai Properties Chief Executive Mohammed Binbrek “We do not begin until the units are sold and then we ask for a 70% deposit.” When asks if he thought the Dubai market would crash with so much construction he replied ” Around 40% of the population is under 20 add this factor to a population that is growing it implies much more houses.

With so much construction planned to make Dubai the city of the future it is a great time to buy property in Dubai.

Want To Buy Property In Dubai?

As you know Dubai’s property market is one of the most famous markets in the world.The design of the towers are wonderful.The construction materials are perfect.The prices are good.The government is planning to build the first and best things in the world like the tallest the biggest the largest and….in Dubai.I am sure that property is one of the most important businesses of the government.They are going to increase their populations to double.

They have some huge projects such as The World (including many islands shaping the World), Palm Deira, Palm Jumeira, Palm Jebel Ali (three big islands shaping palm), Dubai sport city(the fist city of sports in the World), Dubai Media City(the biggest in the world), Dubai World Central International Airport(the biggest airport in the world), Golf World, Dubai Motor City(Formula 1).

As an investor you can invest in many projects in Dubai, as the prices are increasing everywhere.You just need to find the best one.Many people from different countries of the world started investing in Dubai.Almost 178 different nationalities live in Dubai and most of them are investing there.

You can also find many projects under construction and ready ones if you are going to buy something as an end user . Places your family and you will love and may find it the best place to live.You may have greenery, waterfront,good apartment design in your dream house or apartment.

All means that it is wise to start business in U.A.E and specially Dubai property market.It will be a great experience for you and the outcome will be unbelievable.