Investing Real Estate in Dubai
There is a perpetual speculation amongst the Dubai real estate observers whether or not this fast upcoming business and tourist destination in the world map will ever come up at par with the fortunes of mature real estate markets of London or Hong Kong. Factors have been examined that could be instrumental in ripening of the property markets of Dubai making them high returning and sustainable for the long term land investors.
The current trend of buying off stock plans and realizing capital gains from them as soon as possible makes the real estate in Dubai very ephemeral and is not sustainable at all.
Dubai is the land of immigrants coming here on work permits with no long term plans to stay back. They have no intensions investing in real estate here and prefer to rent the property in Dubai for the fixed time they have to stay here. Hence the future of demand for real estate is definitely high here as in Hong Kong or London but it is for rental. The property owner rides on the income from the rent of the property stock, the cost of which keeps multiplying with the typical real estate cycle which restarts as the market matures.
The present short term crisis in the real estate markets in Dubai is healthy and is rather much required considering the long term economics. There is a desperate need for elimination of shaky speculators and developers who are financing their projects on the back of the proposed stock sold and those in the weak financial situation to clear the market which could be then rebuilt on the dynamics of the real demand –supply equation with genuine and long term players entering the real estate business.
Currently Dubai is fast being geared up as keen business player in the global market on the lines of Honk Kong, New York and other world class cities. With the completion of its esteemed project of Dubai land it will come up as one of the prime tourist destinations although it is already the undisputed business capital of the region and will remain so in times to come considering its up market and remarkable free trade zones and low/no tax policies. The concessions and facilities extended by the UAE government will go a long way in facilitating the establishment of Dubai as the leading financial hub and a global player in the world markets. This should see Dubai through higher in demand in its real estate with global biggies setting up their offices and business in Dubai and the demand coming from its affluent public simultaneously. The prices will substantiate strongly with the ever multiplying rental yields from the property assets and the resale options over the years, an aspect of income recovery inherent in the Dubai’s economics considering its transit population structure.
The current trend of buying off stock plans and realizing capital gains from them as soon as possible makes the real estate in Dubai very ephemeral and is not sustainable at all.
Dubai is the land of immigrants coming here on work permits with no long term plans to stay back. They have no intensions investing in real estate here and prefer to rent the property in Dubai for the fixed time they have to stay here. Hence the future of demand for real estate is definitely high here as in Hong Kong or London but it is for rental. The property owner rides on the income from the rent of the property stock, the cost of which keeps multiplying with the typical real estate cycle which restarts as the market matures.
The present short term crisis in the real estate markets in Dubai is healthy and is rather much required considering the long term economics. There is a desperate need for elimination of shaky speculators and developers who are financing their projects on the back of the proposed stock sold and those in the weak financial situation to clear the market which could be then rebuilt on the dynamics of the real demand –supply equation with genuine and long term players entering the real estate business.
Currently Dubai is fast being geared up as keen business player in the global market on the lines of Honk Kong, New York and other world class cities. With the completion of its esteemed project of Dubai land it will come up as one of the prime tourist destinations although it is already the undisputed business capital of the region and will remain so in times to come considering its up market and remarkable free trade zones and low/no tax policies. The concessions and facilities extended by the UAE government will go a long way in facilitating the establishment of Dubai as the leading financial hub and a global player in the world markets. This should see Dubai through higher in demand in its real estate with global biggies setting up their offices and business in Dubai and the demand coming from its affluent public simultaneously. The prices will substantiate strongly with the ever multiplying rental yields from the property assets and the resale options over the years, an aspect of income recovery inherent in the Dubai’s economics considering its transit population structure.
posted by Property Reporter at
10:51 PM
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