Is Dubai still the Wonderland?
There is a often a widely acknowledged speculation and murmurs amongst the real estate market consultants and experts whether the soaring prices of the Dubai property are an indicator of its maturity and as per any cycle destined for its eventual collapse.
Daniel Husain, vice president of Dubai Lagoon, one of the emirate’s largest private sector real estate projects under development differs from this traditional point of view. He optimistically predicts the Dubai property prices to go fifty percent higher than its present market value. His prediction is not about throwing words in the air, he has strongly grounded facts and experience to support his statement. His company situated in the Dubai Investment Park has Dh 3 billion project under its belt constituting 53 residential buildings spread across 40 acres of land which means space covered by 40 football fields. The project launched in two phases is due its completion by June 2008 has already sold off 80 percent of its work; the overwhelming buyer’s response reflecting their faith in investments in the real estate Dubai assets. Reciting his own personal experience he says that initially they too had their moments of doubt when warned by the industry experts which were soon melted when the project sold all its Phase 1 apartments-1,752 of them in 52 days making an average sale of 31 apartments per day contrary to the warning of only 3 apartments per day. Elaborating his view point Daniel Husain further adds that with the average salary of Dubai income earners ranging between Dh 8,000 and Dh 10,000 there is still scope for genuine need for affordable housing amongst the salaried class which would be always on the up rise along with the foreign companies considering the lucrative facilities and superior standards Dubai has to offer. This would always appeal the individuals and companies alike to test their fortunes in Dubai and a floating its property prices by at least fifteen percent. He is also upbeat about Dubai Lagoon’s prospects: “I believe, on a conservative estimate, that on completion, its prices will go 30-35 per cent higher from where they are today.”
The demand for housing and commercial property will also stay strong to the advantage of the property owner considering the constant influx of the expatriates to this ‘wonder’ land. The property owner can always reap on the rental yield which in Dubai is eight to fifteen per cent, tax free and is much higher than anywhere in the world
Daniel also clarified that rising prices is a problem for the developers as well. The rising prices directly imply the construction prices also go up. According to the report by the industry consultant EC Harris, the construction costs including that of raw material and labour jumped by 28 per cent in the first eight months of 2006. Dubai Lagoon prefers the foreign contractors notably from Thailand and Myanmar to the local one for their superior negotiation skills and experience in begetting their supplies of steel, cement and other raw materials from global markets at competitive rates and quality.
Concluding his view point he affirms “Dubai still remains a great place to invest in” and this is one of the great reasons that Dubai will always remain the ‘happening’ city for the real estate investors and second-home buyers for now and in times to come’.
Daniel Husain, vice president of Dubai Lagoon, one of the emirate’s largest private sector real estate projects under development differs from this traditional point of view. He optimistically predicts the Dubai property prices to go fifty percent higher than its present market value. His prediction is not about throwing words in the air, he has strongly grounded facts and experience to support his statement. His company situated in the Dubai Investment Park has Dh 3 billion project under its belt constituting 53 residential buildings spread across 40 acres of land which means space covered by 40 football fields. The project launched in two phases is due its completion by June 2008 has already sold off 80 percent of its work; the overwhelming buyer’s response reflecting their faith in investments in the real estate Dubai assets. Reciting his own personal experience he says that initially they too had their moments of doubt when warned by the industry experts which were soon melted when the project sold all its Phase 1 apartments-1,752 of them in 52 days making an average sale of 31 apartments per day contrary to the warning of only 3 apartments per day. Elaborating his view point Daniel Husain further adds that with the average salary of Dubai income earners ranging between Dh 8,000 and Dh 10,000 there is still scope for genuine need for affordable housing amongst the salaried class which would be always on the up rise along with the foreign companies considering the lucrative facilities and superior standards Dubai has to offer. This would always appeal the individuals and companies alike to test their fortunes in Dubai and a floating its property prices by at least fifteen percent. He is also upbeat about Dubai Lagoon’s prospects: “I believe, on a conservative estimate, that on completion, its prices will go 30-35 per cent higher from where they are today.”
The demand for housing and commercial property will also stay strong to the advantage of the property owner considering the constant influx of the expatriates to this ‘wonder’ land. The property owner can always reap on the rental yield which in Dubai is eight to fifteen per cent, tax free and is much higher than anywhere in the world
Daniel also clarified that rising prices is a problem for the developers as well. The rising prices directly imply the construction prices also go up. According to the report by the industry consultant EC Harris, the construction costs including that of raw material and labour jumped by 28 per cent in the first eight months of 2006. Dubai Lagoon prefers the foreign contractors notably from Thailand and Myanmar to the local one for their superior negotiation skills and experience in begetting their supplies of steel, cement and other raw materials from global markets at competitive rates and quality.
Concluding his view point he affirms “Dubai still remains a great place to invest in” and this is one of the great reasons that Dubai will always remain the ‘happening’ city for the real estate investors and second-home buyers for now and in times to come’.
posted by Property Reporter at
11:02 PM
1 Comments:
The problem with Dubai is not the investment story, it's the intellectual quality of the population and, especially, journalism.
Dubai is not a culturally deep place to be. It doesn't attract much talent, despite all the hype. Let's face it, if you're already successful in your own country why would you plump for living in the desert, in a place famous for nothing?
Those of us who come from investment banking in emerging markets, and who did chose to live here, see that there are three things which make Dubai a long term buy.
One is the location. Without doubt, Dubai will become the Singapore of the Middle East and current property prices are at least 100% lower than the levels one should expect to pay for exculsivity in a first world setting. Two, capital is attracted here because Dubai is the only place in the Middle East offering first world standards of asset protection and three, the oil boom ain't going away. This place has a licence to print money for a long time and at end-2007 we are only at the beginning of a boom.
There is a lot of riff raff and appalling service posing as quality in Dubai. But over time, these will be cast asunder and the Singapore of the Middle East will reward those willing to look to the long term and invest.
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