How to: invest in Dubai property

As Dubai heads towards Expo 2020, the UAE property market is looking like a smart move for savvy investors

Dubai has been a buzzword on the international property scene for some time. From its humble real estate beginnings in 1997, the opening up of the freehold property market to international buyers in 2002 and the boom that followed to the crash of 2009 – in less than twenty years this once camel-strewn desert has turned into a hi-tech metropolis, one that has experienced its fair share of property highs and lows. So where does that leave the market now?

Constructio in Dubai by-Peter-Gronemann-FlickrPeter Gronemann/Flickr

What does the Dubai property market look like?

Much speculation has been made about the current and future property market in the UAE, but with recent positive growth, maturity and correction of the market, new measures in place to protect the interests of international investors and the economic prospects and infrastructure developments associated with the upcoming Expo 2020 Dubai, experts are suggesting that now is a far more stable time to invest in the region than previous years.

According to the recent Global Residence Programme Index (GRPI), the UAE is ranked first in the Arab world and 15th globally, ahead of Hong Kong and Cyprus, as one of the best destinations for people seeking residence outside their home country. General Manager of Hamptons MENA, Mr Ranju Kapoor, would agree, citing Dubai and the UAE as a solid investment choice. “International investors have a strong opportunity now to invest in Dubai, thanks to its current positive economic climate and the prospects for growth led by the Expo 2020 Dubai. The market is increasingly becoming end-user oriented, which sustains demand,” he explains.

Dubai-Marina-and-JBR-aerialDubai's metropolitan area is ever expanding

There is no denying the lure of the region – its tax-free environment, year round sunshine, central hub location, modern infrastructure and cosmopolitan lifestyle. And with desirable holiday home hotspots and communities including The Arabian Ranches, Dubai Marina, Downtown Dubai and the Palm Jumeirah, as well as more recent affordable projects in developments such as the newly launched Town Square by Nshama, Dubai is undoubtedly a great ‘destination’ for a heart-led investment.

What about Abu Dhabi?

And it is not just Dubai that should be considered, but Abu Dhabi also. “Abu Dhabi is growing fast and has several high-profile developments that assure investors a truly world-class lifestyle,” explains Mr Kapoor. “Demand in the residential sector continues to be robust. The supply is tightly controlled keeping value and yields high.”

Dubai-Marina-by-Guilhem-VellutGuilhem Vellut/Flickr

Since the crash of 2009, the UAE government and UAE Central Bank has taken concerted measures to ensure the long-term stability of its property market and strengthen investor confidence. This includes the setting up of Escrow accounts for property developments, introducing mortgage caps as well as the Dubai Land Department doubling the property registration fee to 4%. Developers such as Emaar have also introduced several regulations to promote market stability and to minimise the adverse impact of heavy speculative practices and measures.

Dubais-rising-infrastrcuture-photo-courtesy-of-Rob-Oo-FLickrRob Oo, Flickr

Additionally, in Abu Dhabi, the Government has recently issued a decree to regulate and improve transparency in their property sector. “Mandating that brokers and developers must be licensed and introducing rules to protect buyers of off-plan property in Abu Dhabi, will contribute to greater investor confidence,” explains Mr Kapoor. “Abu Dhabi Government has clear guidelines and regulations aimed at safeguarding the interests of all stakeholders including international investors,” he adds.

Saadiyat-Beach-Residences---Community-CentreSaadiyat Beach Residences

Tips for investing in the UAE region

So what makes a wise and confident investment in this now ‘safe investment haven’ as Mr Kapoor describes it? “International investors must carefully evaluate the segment they want to buy in for the best possible yields. Buying a property off-plan and selling on completion is a good short-term approach,” advises Mr Kapoor. “However focusing on steady or high rental yields will generate long-term value. With new supply entering the market, property and rental values for residential property are further stabilising.”

Artist-rendering-of-Town-Square-by-Nshama

Mr Kapoor also advises that it is not just residential investments that should be considered, but the commercial market also. “The commercial sector offers excellent opportunities with over 90 per cent occupancy rates, a trend set to continue through 2016,” he explains.

Back-pool-elevation---Night dream palace dubai

Dream Palace Residence, Dubai

As with all successful property markets, the key is supply and demand. And with the upcoming Expo, which is seeing massive investment into infrastructure development and during which a projected 25 million people will visit the city over a six-month period, demand for property will be strong. “With Dubai’s preparations for the Expo and Abu Dhabi’s Vision 2030, the two cities are poised for stronger growth in the coming years. The UAE is striving to achieve its Vision 2021 to be among the best nations in the world as it marks its golden jubilee of formation in 2021. For international investors, this is a good opportunity to be part of a dynamic economy that is fast-evolving as the global hub for business and leisure.”

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