United Arab Emirates
Dubai
Dubai is the second largest Emirate of the United Arab Emirates and offers a variety of scenery, luxury and activities. Dubai has year round sunshine and beautiful sandy beaches alongside the warm clear waters of the Arabian Gulf. It also has mountains that offer spectacular views as well as desert expanses with rolling dunes offering a variety of desert activities.
Dubai is also home to the world's richest horse race, the PGA Desert Classic, international standard power boat racing and the Dubai Rugby 7's.
DUBAI THE ECONOMIC MIRACLE
May 2002 will go down in the history of Dubai real estate as the moment when the freehold property revolution began. Before then only UAE nationals could own property.
2001 had ushered in the 99-year lease for foreign purchasers but this was not particularly successful. It was the adoption of freehold foreign ownership that ignited the current real estate boom in the Dubai residential property market.
The larger projects such as the second phase of Emaar's The Meadows villas saw almost a thousand people queuing up for a slice of the action. All 700 villas sold in a few hours.
The Palm Jumeirah with apartments and thousands of villas marketed as the eighth wonder of the world with its iconic 5km long, palm-shaped island became an international success story from its first offering.
The big players all government backed such as Emaar, Nakheel and Dubai Properties all began large projects providing homes for an unsatiable demand fuelled mainly by speculators. Time to delivery was the main concern for the developer not selling its products. Various themed projects added variety including golf courses such as Arabian Ranches. Two further Palms also came onstream for sale; Palm Jebel Ali and Palm Deira.
Nakheel added the Jumeirah Islands project of villas clustered on a series of small islands surrounded by lakes. Emaar followed up with the Dubai Marina an attractive 3.5km artificial harbour created behind the existing beach hotels.
Wealth from property investment
By 2005
those that had bought Property in Dubai
in every project had seen considerable rises in their property values.
Some doubters were already talking up a crash but the Property section
of AME Info correctly predicted the boom was not over yet. Rising
prices and flipping properties had made quite a few people rich,
whilst the sceptics found that their rental costs were surging,
leaving them poorer both in investment terms and in their monthly
outgoings.
The Dubai share market peaked and then crashed. This meant that
the oil dollars floating around in abundance in Dubai found a home
in property further boosting the market.
2006 brought construction delays due to the shear volume of construction
projects and the over optimistic construction schedule. The speculators
were cashing in their rewards and selling on to second buyers often
before project completion, creating a resales market and a plethora
of estate agents. The market maturity saw an interest in villas
as a more long term investment strategy by the new buyers took hold.
Growth of mortgages
Late 2005 brought HSBC offering local mortgages. At this time, AME Info published an article explaining: that the pioneer home buyers in Dubai three years ago, faced a short-list of one company when arranging a mortgage; Amlak Finance was the only lender. Since then Tamweel has been created as a local rival and several local UAE banks have entered the mortgage market included most recently the Abu Dhabi Commercial Bank.
'HSBC has been in the market for a while but was offering finance on a very limited selection of Nakheel properties. Now this giant of international banking has rolled back the frontier a stage further with its flexible mortgages.'
New finance is good for any market, especially from a trusted global household name like HSBC.
Villas outperform
The average price per square foot of a Dubai villa improved by 31 per cent IN 2005. 2006 was a good year from an investment perspective. Delays in the delivery of new projects continued to push back the date of likely oversupply, and the long-awaited Dubai Property Law was finally decreed.
This meant that for the first time foreigners could register properties under their own names in the Dubai Land Department which offers the very latest in electronic land and property title registration.
AME Info noted, 'Previously buyers held a contract of sale from the developer which allowed transfer of ownership only through the developer, with an agreement in the contract that a full and unencumbered freehold title would be granted on the property as soon as it became available.
Indeed, the biggest practical impact may be felt in the local mortgage market rather than the re-sale market.'
Construction delays
In the spring of 2006 the biggest factor in the local property market was a shortage of completed property and longer and longer construction delays.
A brief glance through the ever-thick pages of the Gulf News property sections, there are three of them, confirms that price levels were up in 2006. If you look at apartments in The Greens or villas in The Meadows you would have found 10 per cent was about the going rate of house price inflation that year. The reason being buyers are looking for completed property, available for occupation, and not an off plan tower emerging in the Dubai Marina or Jumeirah Lake Towers district.
Source AME info
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