FAQs
The fact that Dubai is the world's biggest boomtown just at the moment is cause for any investor to take a good close look at the property market, but it's far from the only one, here are few more...
The tax regime.
No Capital Gains Tax, and no tax on rental income, makes for an extremely attractive location for anyone intent on building an extensive property portfolio and reaping the full rewards.
Demand outstrips supply.
The population in Dubai is projected to rise from 1 million to 3 million by 2010, while the tourism market is set to almost triple from around 6 million to 15 million visitors by 2010. However, the property inventory available in Dubai remains relatively small compared to the massive influx taking place. As a result where both residential and tourism lettings are concerned, Dubai is a seller's market.
High rental returns.
The supply and demand situation leads naturally to outstanding guarantees of high rental returns and capital appreciation. Rental returns of between 12% and 15% are the norm, with capital appreciation running at anywhere between 40%-80% per year. Many people have doubled their investment capital within 12 months.
Low purchase prices.
Property prices are still significantly lower than in other overseas property markets like Spain and Eastern Europe. The entry level into many developments is as low as £75,000 for studio apartments. A very attractive proposition with the guarantee of 12% rental returns.
Dubai is becoming famous
As the Dubai Government property developer Nakheel says in its advertisements, "The Palm put Dubai on the map, The World put the map on Dubai." No other city in the world comes close to the ambition, vision, and scale of development in Dubai, or is more successful at marketing itself. With more and more groundbreaking developments planned, like the Burj Dubai (the tallest tower in the world), The Mall of the Emirates (the largest shopping mall in the world), and Dubailand (the largest theme park in the world), people the world over are queuing up to share in the dream.
New federal law
Although Crown Prince Sheikh Mohammed bin Rashid Al Maktoum issued his decree on freehold property in 2002, it has still not yet been codified into federal law. This has created a certain amount of investment uncertainty. However, a new federal property law is expected before the end of 2005. This would open the market to a wider pool of investors, increasing demand still further and pushing prices up. Now, is therefore the optimum time to buy in Dubai.
Finance options are improving
Originally notoriously difficult to get finance in the UAE, the combination of initiatives by local and international banks and financial institutions is creating a much more mortgage friendly environment. Finance options are increasing month on month, more players are coming into the market and the cost of borrowing is coming down, opening Dubai up to a much wider range of investors.
The UAE economy is booming
Oil revenues are sky-high, economic reform is happening fast. Abu Dhabi will be next to invest hugely in its domestic infrastructure and Dubai will be happy to supply and contract to meet this ambition next door. The net effect is a stable economic environment in which to invest - something already well known in the Gulf region, and becoming increasingly understood elsewhere in the world.
Residency
On acquisition of property in Dubai purchasers are supplied with a UAE resident's visa.
Become part of the dream
With its year round sunshine, miles of azure sea-lapped beaches and 2 million square feet of tax-free shopping, Dubai is now the en vogue playground for the world's celebrity jet set and the destination of choice for an anticipated 15 million visitors a year by 2010.
The Middle-East's City of Gold is also home to a rapidly growing ex-pat community of highly skilled professionals from all over the world. Between these residential and tourism markets, investors are presented with unrivalled year round rental opportunities.
The private property scene in Dubai changed forever in 2002 when Crown Prince Sheikh Mohammed bin Rashid Al Maktoum issued a decree allowing freehold property ownership to non-nationals for the first time. It was this decree that sparked the great Dubai real-estate boom.
Since then the tourism and commercial property scene has exploded with internationally renowned developments like The Palm, The World, the Burj Dubai and the Mall of the Emirates capturing imaginations and investor capital the world over.
Groundbreaking development after groundbreaking development is planned over the next five to six years as Dubai moves rapidly towards its self-proclaimed objective of becoming a premier tourism and commercial centre, not just in the Middle East, but on a global scale.
So if you're looking for rapid capital appreciation and guaranteed high rental returns from a property development of unparallel vision and scale - nowhere else on earth comes close to Dubai.
