Only 30 years ago Dubai was a tiny fishing port. By 2005, it had seen economic growth of 17% - which is faster than the Uniited States and China.Home to the world’s first indoor ski resort, the first underwater hotel and a building that, when completed will rise far over the Taipei 101 skyscraper, Dubai is developing at such a rate that it is thought that a quarter of the world’s cranes are in use there.  Increasingly popular with ex pats attracted by the investment potential, there is a greater demand for property than supply - and as competition increases, the developers are increasingly trying to outdo their competitors.

This is most apparant on the Palm Jumeirah island, where the array of investment property is vast.  One of the largest projects here is the Kingdom of Sheba where more than 10% of the residential phase sold in one week when the scheme was launched in December 2006. The villas, townhouses and penthouses in this complex all come with sea views and access to a private beach club, gym and restaurants.  Invest in a five-bed townhouse and a free year’s membership to a yacht hire scheme is thrown in for good measure!.

So, is now the time to invest in Dubai?  Many fear that Dubai’s sudden rise in popularity wil be short lived as there is rising competition from elsewhere in the Middle East - e.g.  Bahrain is constructing Durrat Al Bahrain which will be a group of 13 artificial islands, home to hotels, apartments and shops.  So what are the pros and cons of investing in property in Dubai?

For a start the location offers year round sun and purchasers are entitled to apply for residency.  There is no capital gains tax or stamp duty on freehold property.  On the down side, the weather can reach searing temperatures in the height of the summer ( the hottest temperature recorded was 47.5% in the summer of 1999), and residency isn’t guaranteed.  There is a 7% cap on rent increases this year (2007) ; a drop fropm the previous rate of 15%.  Until the metro system is built you should expect heavy traffic congestion.

80% of Dubai’s population are ex-pats. Its population is expected to rise to 1.4 million by 2010.

Whenever you buy something you always have to be sure that the buyer actually owns what is being sold. Yet in their rush to buy in Dubai some buyers seem to have forgotten this - a simple note of sale from the seller is just not enough. While Dubai has a reputation for having a transparent and trouble free property purchase process it is not safe to enter into any form of property transaction without the aid and support of a competent and independent lawyer.

This entry was posted on Monday, January 29th, 2007 at 6:28 am and is filed under Buying property, Dubai. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.