The property market market in the United Arab Emirates, one of the hottest in the world, is set to continue until 2015 and beyond, according to new reports. Real estate and construction markets in the UAE are primarily focused on Dubai, which has been booming for several years, and the newer market of Abu Dhabi.
Two recent studies by HSBC and Damac Capital International of Dubai both indicate that supply will not catch up to demand for a number of years, keeping the markets strong.
Traditionally the most popular locations with second-home buyers and British investors are Spain and France but Dubai is beginning to rival them. Dubai investment property is attractive due to its tax-free status, excellent facilities and low crime rate.
International investors buying property in Dubai need to concentrate their search for properties in Dubai to the many Freehold Areas in Dubai.
Properties that are suitable for foreign buyers include the following freehold zones: Dubai Sports City , Dubai Marina , I.M.P.Z. International Media Production Zone , Jumeirah Village , The Palm Jumeirah, Shaikh Zayed Road, International City, The Lagoons, Palm Deira, Jebel Ali Airport, Emirates Road, Dubai Land ,Business Bay ,Downtown Dubai and much more
Recently Dubai developers have had to comply with a new piece of legislation Law No 8. This makes escrow accounts compulsory for all Dubai off-plan developments, with money released only on the order of the Dubai Land Department. This move marks an end to the days when any developer could launch a project and collect deposits without a guarantee that the funds would be used correctly. Many pundits feel that this could slow the Dubai market but increase confidence with investors
Middle East online news website Gulfnews.com reports that Dubai will continue to be a strong real estate market, while Abu Dhabi is set to take off. Rental yields in Abu Dhabi are expected to be in excess of 7% until at least 2013 and perhaps beyond.
According to Damac Capital’s analysts Hany Seif and Pamela Chikhani, Dubai will remain a major Gulf real estate market for years to come. By some estimates, over the next 10 years both local and international real estate investors will pump in almost $300 billion into Dubai’s real estate developments. According to HSBC’s real estate analysts, Walid Khalfallah and Majid Azza, Abu Dhabi is becoming a major regional real estate market. “The Abu Dhabi story is gaining credibility. After a slow start to the year, sales activity has picked up in the second half of 2007. The market remains extremely tight, with stronger-than-expected growth in rents [22 per cent] and prices [18 per cent],” they said in a recent report.
Abu Dhabi does not have the liberal international property laws that neighboring Dubai has yet, but things are improving there. The office market is particularly strong and vacancy rates are below 1%. With increased deregulation, Abu Dhabi will continue to gain ground on its more prominent neighbor. Both should see strong growth in the coming years.