22: Dubai - any good for investment?
This special report gives some objective views on property investment in
Until the late 1960s,
The city at one stage, some 20 years ago, vied with
So what are
· has year round sunny weather temperatures in the winter drop to 12-15 deg Centigrade at their coldest and rise to over 45 deg Centigrade at their warmest.
· has a stable economy and has a very low crime rate and is considered a secure place to visit.
· is cosmopolitan with diverse mix of people making for a vibrant social and cultural environment.
· is booming with new internet, telecom and banking sectors all expanding the city is now considered the regional centre for the
· has an expanding economy with many exciting job opportunities.
· is well known for its gold trade and shopping experiences.
· is truly innovative with Palm developments,
· has frequent flights to Europe, south Asia, Far East and other destinations make Dubai a popular stop-over and airline hub many cheap direct flights are available.
· has no income tax, and generally very low levels of over taxes this helps make property investment attractive.
· Property is currently low cost and there are plenty of new developments to choose from.
· Amenities are superb with towering new hotels, shops, water sports, boating, beaches, and inland desert trails to explore.
· The desert mountains of
What are the key investment risks?
· Sustainable security both specific to
· Oversupply of new apartments and houses might lead to rental yields dropping and prices stagnating there is currently little or no sign of this since demand is so strong.
· The oil price crashes affecting the regional economy. However,
Capital prices in
So what type of properties make the best investment?
For the highest rental yields, PropertyInvesting.nets advice to most investors is to purchase good quality second hand property close as close to the city centre and beaches as possible but at a reasonable price. You need to make sure the rental demand is good either for holiday lets, or better still, permanent rentals. You might purchase a 1-2 bedroom apartment for £50,000 and town house staring from say £120,000. Rental yields of over 10% can be achieved.
Buying off-plan can be attractive but remember the developer will be making a sizable portion of the profit, and you might end up with a flood of similar properties to be rented out at a similar time. Because new build properties are more expensive and rentals are proportionally less, the yields will be lower.
Very wealthy investors who can handle more risk might consider investing in The World development, a unique development of new islands in the Gulf - which are shaped like the countries of the world.
A good process to follow is to fly to
Areas that are being re-generated close to new large and expensive developments are particularly attractive in essence rubbing shoulders with expensive neighbours will always help.
Finally, make sure you consider the currency risk. You might consider borrowing in Euro,