I'm just back from a short break in Dubai and i am very interested in buying property to rent as part of a longer term investment. The rental is 'supposed' to be anywhere from 8 - 15%, which is the main attraction. However, there are so many projects in Dubai that knowing where to buy is proving difficult. Does anyone have suggestions given a budget of around 100,000 british pound + - 25k
For what it's worth, I suggest you have a good look at the Channel 4 guide to buying in Dubai...and the comments on the Sports City forum.
Having had a quick look at the latter discussion, it is clear that few of the investors, if any, live in Dubai. I do, and whilst I don't want to appear negative, just please, please be very careful. Be sure WHY you are investing, ie. is it capital growth or rental potential.
Many of us here believe the raising property prices won't last much longer than another 3 years max. It is felt that the off-plan prices are kept high by serial property investors who flip their multiple properties within weeks of signing up for them and so on it goes. There are also literally hundreds of completed properties for sale....owners are having trouble trying to sell them..despite what the Estate Agents tell you.
Supply and demand is an interesting factor. Whilst the population here is growing at a staggering rate, so is the amount of living accommodation that is being built. In fact, within the next few months, more than 50,000 apartments are due to be released for completion...one would imagine bring rents down as landlords strive to fill their properties.
Our rent has remained static for the past two years, not because our landlord wanted it to, oh no, he asked the Estate Agent to increase it by 15%, BUT in order to keep rents low and more affordable, for the past few years, Sheikh Mohammed has issued a decree preventing landlords from increasing rent beyond a certain amount...this year, it was ZERO percent increase on last year's rent across all rentals in Dubai. So, these so called guaranteed rent schemes may not be as guaranteed as the Sales Offices will have you believe...unless you are prepared to pay a premium for the property and the Company you purchased it from, in effect, releases your premium back to you over a period of time...calling it rent.
Sheikh Mohammed has also empowered the Municipality Rent Committee to take stronger action against those landlords who try all the tricks to evict current tenants in the vain hope they'll be able to put up the rent by signing up new tenants... The tide is turning in the favour of the tenant now..
Dubai is a fascinating place and I am constantly amazed at the amount of changes and development going on, however, it is also a city being built on hype with a massive marketing budget to entice investors and A LOT of rogue traders.
If you are looking at a long term investment, then my personal opinion would be one of the developments around Dubailand. There is going to be so much going on, all year round, and with apartments and villas being built, a sensible investor could probably rent out his property on many short-term holiday lets throughout the year if he kept his rental price reasonable. Having said that, there are already many luxury villas within the Arabian Ranches development being let out on a weekly basis (have a quick search on the internet for private lets). The owners appear to be doing fairly well at the moment, but it is already clear that there will be plenty of owners planning on running short-term holiday lets in the future...just in the one development, which may push rental prices down again in the future. There are also many annual tenants in the Ranches, us included, but given the choice to move closer to work (the main commercial areas where the expats work, are nearer the coast) when more villas are built nearer our place of work in the future, then we would rather do this than remain here. We had little choice when we moved here as these were literally the only villas available for rent, now there are, as you say in your post, so many new projects in the pipeline, that the expat will have more choice where to live, rent or buy in the future.
It may also help to look at the Gulf News, newspaper online which features regular articles on rents and buying in Dubai, and Sheikh Mohammeds latest rulings.
Originally posted by bomberferguson: am very interested in buying property to rent as part of a longer term investment. The rental is 'supposed' to be anywhere from 8 - 15%, which is the main attraction.
If you buy now in Dubai there will be no longer term investment for you, your deposit will be worth nothing after the property loses at least 20% of value.
reader 07 on what ground are you basing your statement.Dubai is still a great investement and always will be especially short term rental,look how expensive hotels are for a family to stay few days!!! i got a unit at the sport city canal resience west and my advice for anyone to invest is to put his/her money there now,if still there's any units left!!
Originally posted by dm10: i got a unit at the sport city canal resience west and my advice for anyone to invest is to put his/her money there now,if still there's any units left!!
Originally posted by dm10: i see you still didn't answer my question!! i would love to know where you invested your money? my guess is,you re all talk!!!
Basing my statement on the recent experiences of many people I know. There will be a glut of propeeties coming into market in 2007-2008.
The money in Dubai have already been made, now it is time to buy only if you like it there.
vbland,a week in dubai under 500 pouds for a family!!!! you are in dream land!! i wish it was,i'll spend more time there! Dubailand is going to be one of the biggest attraction in the world the demand will always be there.it' going to get bigger and bigger.
I personally think buying as an investment in Dubai is not a great idea at this moment in time, yes in 2003/04 brilliant but not know. If you want a place for yourself to use & dont need to worry about rental income to cover costs etc then thats fine, but buying for an investment a big no from me.
Came across the following, its an interesting read;
Information is heavily controlled in the UAE, so don't rely on the local papers to give an accurate view of the dire oversupply of property and the panic selling now under way.
A real estate agent in Dubai - In the past couple of months has been staggered by the number of unbelievable offers coming out.
For example, yesterday she was looking for a 2-bed at Jumeirah lakes that is already being built and will be delivered 2008. She was expecting the price to be in the region of 1.4M AED (a bit under 200k GBP). She called a few contacts and ended up speaking to someone at the developer of a particular tower. They said that in a few days time they should be able to offer her the 2-bed for 1M AED. Yes folks, that's nearly a 30% discount.
It turns out that like many off-plans in Dubai, most of the tower was sold off a year or two back with just a 10% deposit and the rest payable in regular instalments. But it seems large numbers of investors who stumped up the deposit are not meeting the instalments. Without the flow of cash, the developer cannot continue the building work. So they're getting tough on overdue payments and cutting loose the investors. Those guys put 10% down in the hope of flipping the apartment, but the market has turned and no one wants to buy. These investors are not willing to continue paying the outstanding 90% when the apartment price is already heading south. So they just bail. All that is left is for the developer to terminate their ownership for failing to meet the instalments so he can try to recover enough money to keep the building work going.
The most amazing thing as you drive past the hundreds of towers of the Marina at night is how few lights are on in the finished towers. There is a lot being kept empty by speculators. With rising interest rates, significant service charges and prices topping out or even falling, they're not going to sit on empty apartments for long, not when they see the various surrounding towers nearing completion that will pour further supply onto the apartment mountain.
very interesting... I was still under the impression that with all the new project by the goverment (New airport and attracting large companies mainly) they would need new apartments for the employees.
What will happene with the new Waterfront project?
Would you recomend anywhere else in the UAE as an investment?
Investor27's reply seems auto generated I've seen this 2nd time with same word and format. It seems he wants investor to drag out of the amazing city Dubai to elsewhere .....
hi, im not trying to put a "damper" on buying in Dubai im just giving my opinion, "first" you dont need to listen to my advise but this is a forum & we can all put our views across, i maybe incorrect, in late 2005 / early 06 i was looking at buying overseas, i was all set on Bulgaria & did post questions on forums such like this, people advised that bulgaria was not all it seemed & looking back today im glad i listened to the advie given didnt purchase.
My recomendations for countries, i'll give my top three; Morocco, Malaysia & possibly brazil.
Choice is down to the individual & reason for buying overseas.
Originally posted by dm10: investor27,who are you? are you some expert on Dubai market? don't think you are! so why you coming out with false statement.where did you invest?
Why not provide the "truth" then - some incontrovertible facts - rather than suggest another poster is "false"?
Dubai seems to have provided great homes for a lot of people . A lot also talk about increased prices (although without having actually sold).
As to the earlier comment as to where employees building airports and the like will live, I somehow doubt that most of them will be in "luxury apartments".
vbland,i don't think any of us know about what's going to happen in the future in Dubai.what's for sure though Dubai will be built and it will be one of the most amazing cities in the world.they don't need my money or yours for them to achieve success.the differnce between investing in Dubai or Morocco or east europe..is Dubai will always be a class above the rest and it will attract people with money.from my point of you,even if i don't rent my unit,i'll keep it for personel use. and i know how expensive hotels are there from personel experiance,since i go there every year.and i didn't mean the poxy two stars hotels you talking about!!!!
Interesting little debate, so think i'll add my tuppence worth. I have bought an apartment in DSC - Canal Residence West. I have purchased this for the long-term 10 years plus. A couple of observations...Dubai for many in the UK and Europe (who have argubaly have the most money) is a once in a lifetime destination ....2 star hotels dont serve this type of consumer. You go to Dubai your usually wanting and expecting luxury. As somebody stated if you want class then Dubai ticks all the boxes whether it be shopping, eating out or entertainment plus all year round sun. In 3-4 years throw into the mix DSC, which will include world renowned sporting venues and academys supported by worldwide names... Man Utd...sic etc (I'm a Manchester City Fan)!! together with Dubailand then this place will simply appeal to more and more people.
Short term prices may stagnate and may even fall, but whether you decide to buy should be dictated by how long you intend to invest....nobody can see into the future and a suggestion that 'will be no longer term investment for you' is simply nothing more than pure speculation.
Good solid investent locations such as Dubai Sports City, Dubailand have already been mentioned by many of the posters above. But as a long term investment asan agent would be to look into other real estate options for investment, at present there is a lack of office space available in desirable locations which is pushing up office rental rates for example offices in Sheikh Zayed road will cost you over £100 per sqft in rent at present. With up coming business zones such as DIFC, Business Bay, and the like investors can expect high demand for office spaces especially in the freezones where there is 100% ownership rights without UAE national partner being involved.
But it depends on your budget and how much you are actually looking to spend if you want to invest in a good quality office keep AED1.2mill in mind minimum.
Another option for invest into the UAE is to actually invest in Abu Dhabi the capital of the UAE. This Emirate is giving some very positive signs for the real estate investor, with present shortage in properties and increasing investment in Tourism and industry, prices for townhouses can be as low as AED890,000 near the airport making for a strong investment prospect. The situation is quite similar to Dubai in its early years, with residents who were previously unable to buy now being give that opportunity albeit on a 99 year lease which god willing may change in time.
Rents in Abu Dhabi already rose by 30% last year and had to be capped at 7% rise per annum max so prospects are still looking good for the UAE investor.
I've seen Investor77's comments verbatim elsewhere - I take them with a pinch of salt. A 2-bed apt in JLT for AED 1m? Tell me which agent and tower this is in and they'll soon be gone. And Thorr's interests are well known.
There's one big factor that separates Dubai from Morocco, Turkey, Egypt and Bulgaria - you can achieve a long-term (1-3 year) let to someone who's earning a salary from the local economy and can afford to rent your apartment. In most other 'emerging' destinations, the locals are poor and you're dependent on holidaymakers.
Dubai rents are around 7 percent of today's purchase prices. However, the properties they're renting were reserved 2, 3 or more years ago at lower prices than apply today so landloreds are getting 10-15 percent real yields. Buy a property today and, with the current rate of rental inflation, you'll still be getting double-figure returns once it's delivered.
Given that yields in most developed economies are in the range of 3-5 percent, I'd say there's still scope for upside in the Dubai market. As someone recently observed, monthly rental prices are comparable to say Singapore (and growing faster) and yet property prices are at most half as high.
No matter what Dubai is still giving fantastic rentals i would buy 2 studio apartments in International City for around £50000 ready and get at least £5000 rent for each one with payment upfront for all year if you do a deal ,alternative is 2 payments 1 upfront and 2nd after 6 mnths.As this is the cheapest in Dubai the price cannot drop further and as it is the cheapest in Dubai the properties are renting out fast. If you buy elsewhere in Dubai as the others posts suggest the prices are at the top end and i can confirm that prices are slipping due to oversupply of ready properties this year.
Fascinating, encouraging UK people to buy in Dubai. Yet “Luxury Dubai” people/government are buying huge chunks of land in Ulcinj, Montenegro, to build fantasyland, Disneyland , a small Dubai there!! I wonder why? It’s petty cash for Duabian people, but they will be close to Albania, the next pearl of the Adriatic, are they waiting for that country to open up? Go to Apollonia, where Cesar held his rallying calls and where democracy started, according to Aristotle, find the beach from there all you will see is beach and deep blue sea as far as the eye can see… Are the Dubai people looking for history in Montenegro and potentially in Albania ? Begs the question, or is it only money??? Go to Montenegro I say where the youngest town ‘Bar’ is only 600 hundred years old , Montenegro i
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