Property prices in Dubai are far cheaper than those in central London, and half those in Singapore. Almost everyone would like a second home in the sun.
With limited and restrictive investment choices in Europe, the current surge of British buying in Dubai is likely to accelerate as people realise the great appreciation potential.With an estimated shortfall of 40,000 units within the next five years, supply will dry up as demand continues, and this makes property an excellent investment opportunity. Coupled with this, Dubai has sun, sand and a great lifestyle.There are also the obvious benefits of living in a tax-free environment, which is extended to the property market – there are no government property taxes.
Buildings being developed by Dubai’s rental companies are, for the most part, yet to be completed.This means that rental agencies in the area are running at 100 per cent occupancy in almost all of their existing residential developments. Private freehold owners are therefore reaping the benefits. The huge influx of Western professionals and regional businessmen in recent months means that rents have risen 10 to 15 per cent across mid-level housing. The majority of rental property in Dubai comes as unfurnished
apartments. Renting is a straightforward process, and many multinational companies have long-term leases on property for their staff.Your contract will generally be for one year, and make sure you secure a sponsor, i.e. a local, in case of disputes. Expect to pay something in advance, possibly a cheque post-dated six months ahead. Many employers will pay for your accommodation and deduct the amount from your pay.
Buying
It is also possible to own your home outright. Foreigners are allowed to take out a mortgage but they are required to obtain life insurance in order to do so. Freehold guarantees given by developers Nakheel, Emaar and Estithmaar are endorsed by the Dubai government.Thousands of foreign home-buyers and investors have flocked to buy freehold property in the most lucrative property market on Earth as a result.Average villa property prices in Dubai are five times cheaper per square metre than London’s Docklands area, ten times cheaper than Central London and half the cost of Singapore.
Restrictions on foreign buyers
Foreigners can buy in any of the zoned developments that make up the vast majority of “new Dubai”. All property rights are based in contract until such time as the government creates a full, federal property-ownership law.This law is in the making, but until it arrives, property rights remain contractual – between buyer and developer. It should be noted, however, that most developers are actually government owned, which gives a greater level of security. When foreign nationals were first allowed to buy, three years ago, initial purchasers were cautious.This was partly because the concept was so new and partly because investors were used to a stronger regulatory environment elsewhere. Uncertainty has been replaced by enthusiasm to invest due to the quality of return and the stabilising of the rental market.There may still be a huge
number of investors watching and waiting. But if they have genuine interest, they cannot afford to wait for too long.