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Dubai has also been lucky with its timing. Record low interest rates and dismal stock markets are good news for realtors.
There is another good reason why Dubai property is a hit. Because the Dubai government is behind the real estate boom, and has secondary motives such as attracting wealthy immigrants to the city, luxury villas and apartments are being sold very cheaply.
One way you can judge if real estate is cheap, or not is to look at the yield, or rental return. In the case of Dubai a basic yield of 10% on residential property compares with a 6.5% local mortgage rate. Now in London 3-4% would be considered good a good yield today, so 10% implies a considerable undervaluation of property.
Of course, an increase in the supply of property may reduce yields in Dubai. However, that will take some time. The buyers of apartments on Palm Island will not actually move in until the end of 2006.
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| Indeed, the problem is rather the reverse in Dubai. The supply of property is not keeping up pace with demand. A city with a GDP growth rate of around 8% sucks in new people all the time and has a burgeoning demand for housing. |
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| That would mean that villa and apartment values will ratchet still further upwards as freeholders take possession. For the time being buying property in Dubai looks a sure fire winner, if you can find a property to buy. |
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... to buy property/ Investment in Dubai |
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Dubai has no capital gains tax,
inheritance tax – or income tax. |
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Dubai sits on the serene Gulf coast and enjoys year-round sunshine. |
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Property prices have risen by more than 20% in the past 2 years, and capital growth on Dubai property is expected to be in excess of 15% per annum. |
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Property is comparatively cheap
here compared to other major
cities. |
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The purchaser of property in Dubai is entitled to a residence visa. |
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Dubai is a country with many taxfree
high earners and 5 million
visitors a year. |
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Dubai has a very low crime rate. |
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Dubai offers a cosmopolitan
lifestyle with a multitude of
entertainment options. |
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9 |
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Rental income from Dubai
property is presently between
8 and 10 %. |
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The UAE Dirham is pegged to
the US dollar which makes
it a stable currency. |
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UK TEL : 08700 99 2400 OVERSEAS: +44 161 831 7999
FAX : +44 161 831 7772 TEXT FOR BROCHURE: 07800 530 431
Homes Dubai Ltd., 8 Burton Place, 29 Worsley St, Castlefield, Manchester, M15 4LD, UK. |
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