The Dubai property market has caught the attention of many of real estate investors over the last few years. In actual fact, Dubai property market has been the focus of interest for the ordinary buyers and investors since 2004, when it really appeared to take off. Unlike Western real estate booms, this one does not give the impression of having a bust in sight, and this might be one of the reasons why so many investors are attracted to the property market in Dubai, making it the fastest growing city in the world.
It is a true fact that Dubai currently is experiencing around 10% of the population growth per year. And at the moment it comes around to over 100, 000 people that need to be accommodated every year. The statistics also say, that population is predicted to treble in the next 10 years, which obviously will create enormous demand for residential and commercial property. The high demand and population growth lead to a boom in prices of the existing properties. This in turn gives immeasurable opportunity to buy in new development areas, as these will become rapidly part of the mainstream city. Apart from the investors, Dubai is attracting the “high-earners” immigrant workforce, who will and are playing an important part in the impact on property prices. It is said, that some areas of Dubai areas are bound to reach the prices of London and New York.
The role of tourism also plays a tremendous part in the influential process of Dubai property prices. In the last 5 years the amount of tourists is estimated to have increased from 2 up to 4 million people. The projections are to reach a 15 million mark by the end of 2012. Hotel occupancy has already beaten hotel competitors of London, New York, Singapore and Paris. Expansion of tourist market to the highest point guarantees high level of short-term rentals, which ensures high rental returns on the properties, which consecutively leads to the growth of the property prices again.
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Dubai claims soon to become business and financial capital of the Middle East. And it looks like it is not just proclamation. The fact that Dubai is conveniently situated between Tokyo and London in terms of time zone plays its constructive role and provides key addition to the world financial market. The expansion of business in Dubai is emphasized by the shortage of the office space and staggering mass construction of necessary office space. To meet demand, office space availability will have to be doubled from 14 million sq ft to 28 million sq ft (working on a two-year period).
So these issues of business boom, mentioned before correspond to wonderful opportunities for investing in commercial and office property.
Western inflation not being an issue for Dubai property market makes it even more valuable to the public than before. The region carries on growing in leaps and bounds, but in encouraging ways. More homes are being purchased in Dubai than anywhere else in the world, maybe because people realize that they can pay € 250.000 for a property now and double their money in just a couple of years time.
Buyers from abroad expect some rules to change in their favor in purchasing process of property in Dubai. Those buyers who get high rentals for their properties are probable to invest in a second home. One does not have to worry at all at this moment and time about real estate bubble bursting due to any inflation or high rentals.
All properties in Dubai are under active course of construction. Labour from all parts of the world is being summoned to accelerate all development of property in Dubai area. Important developers like Emaar Properties, Damac Properties, Sabah Real Estate Group, Al Nakheel Properties, etc are transforming Dubai with their numerous skyscraper projects being sold from the construction stage.
The National Bank of Dubai monitors closely property market in Dubai. In 2006 it stated that the inflation rate around 18-20%. Every factor contributing to the growth in rates is thoroughly examined. Aspects like gas, education and health care have also been accounted for inflation of property in Dubai. But there is no cause for concern, as the growth of the economy in Dubai is being controlled cautiously by the government (apart from that, property in Dubai are tied up with USA Federal Reserve rates).
Due to the increase of rates some people would prefer rentals rather than buying a Dubai property. The question then is: will investing in Dubai real estate be beneficial? The answer is: Yes. Taking other factors into the consideration, like loan facilities and Dubai property appreciation.
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