Why Investing Property in Dubai?
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 Docklands 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. Thus 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. What looks like massive supply today in Dubai may be nothing compared with demand in a few years time. Dubai is after all growing its GDP by 7-8% a year and shows no sign of slowing down, quite the contrary.
Rising Building Costs
A fundamental influence on property prices are rising building costs. The low US dollar is pushing up the cost of materials from Europe which is pushing energy prices to its peak.
Tax Free Income
Dubai is a city where a lot of 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 Centre
Long recognized as the leading regional trading hub of the Middle East, Dubai has now become an international business and re-export centre. The country has developed rapidly over the past 10 years and has transformed itself from an oil dependent regional entrepot into a highly diversified international business centre of global significance, which offers opportunities for UK business people in all sectors. At Present, over 500 UK companies have been set up in Dubai.
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. Dubai is going from strength to strength.
Buy v Rent
Any long-term resident will pay out a fortune in rent, and that money is better invested in a property. In addition, it is presently up to 40% cheaper to buy than to rent, so buying a big villa costs the same as renting a small one. The 10% down payment on a new villa is the same as the upfront annual rent payment. Rental yields of up to 10% are achievable in Dubai compared to under 5% in Central London.
Returns for Investors
Properties are appreciating steadily at the rate of 10% - 15% per annum, (for some developments even greater). It is estimated that by 2009, based on current growth, your initial financial investment is expected to at least double.
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.