DUBAI AND ITS MANY POSITIVE FUNDAMENTALS

Thursday, 03 Jul 2008

The price of property for sale in Dubai is continuing to increase, according to industry specialists.

Sandcastles-Property.com described the growth of the housing market over the last few years as "phenomenal".

This means that overseas property investors who enter the market early could get a residence for a relatively low price, as values will be much higher further down the line.

In addition, people who own a house could potentially make a considerable profit should they choose to sell up after its value has increased.

Paul Greaves, spokesperson for Sandcastles-Property.com, said: "Investors are now looking outside the eurozone at markets such as Dubai to invest in property."

He added that the region's popularity is partially due to high prices in Europe and the weakness of the pound against the single currency.

According to Gulf Weekly, Dubai has seen "dramatic growth" in its housing market in recent years.

Dubai is currently seeing its highest rate of house price inflation for several years...

According to AME Info, property values in some areas have gone up by as much as 15 per cent. A company spokesperson added: “Investors who enter the market now will be able to snap up a residence for far less than if they wait until a later date. Furthermore, buying early will allow property owners to enjoy considerable capital appreciation.

"Sitting on an asset that is rising in value makes obvious sense - The property boom is far from over, as all the drivers of growth in the market are firmly in place”

Shelter Offshore recently praised the UAE for its “thriving domestic market and booming economy”, enthusing that the UAE was “an ideal location for overseas property investors, especially since the ongoing credit crisis is continuing to hit other markets”.

Investors into Dubai's property market are likely to be more than happy with the returns they achieve - and demand for property and tourist growth should only make their investment more secure and profitable over the coming years, one expert has said.

The emirate is fast becoming an important financial centre and a tourist haven - as it undergoes rapid expansion and continuing government-controlled tourist and business development.

Because of this, studios and apartments in popular complexes can make excellent investments, commanding high rental yields and strong prospects for future growth, according to Giulio Giancovich, a senior Dubai consultant at The Best in Dubai.

"Purchasing a unit in one of the luxury new residences such as Lago Vista or Ocean Heights can net you up to 18 per cent rental yields per year," he comments.

"With up to 51 per cent tax free growth and an expected 15 million tourists by 2010, the buy-to-let market is a very attractive prospect for property owners," he adds.

Property authorities in Dubai are planning introduce long rental contracts between landlords and tenants, as they look to soften rapid rent price inflation in the emirate.

Marwan Ahmed bin Ghalita, head of the newly-formed Real Estate Regulatory Authority (RERA), says that the legislation will be introduced early next year.

'We will be introducing long-term rental contracts by the beginning of 2008 to stabilize the market," he told new agency Reuters in a phone interview conducted on Tuesday.

The purpose of the contracts will be to reinforce a sense of confidence between landlords and tenants - and they will last for between three and five years, according to the RERA head.

Rent prices have been subject to rapid inflation in recent years, as demand for rental properties continues to outstrip demand, despite the high level of development in the emirate.

Landlords are subject to a seven per cent cap on rental rises, although this no longer exists when the tenant changes - so property owners are free to up rent prices as soon as they get a new tenant in.

Mr. Ghalita said that he did not expect rental prices to rise by more than seven per cent in 2007, adding that the cap was unlikely to be changed.

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