comments on investing in dubai?

Question

thinking of investing in real estate in dubai. any comments anyone?

Answer 1

The basic principle of real estate investing is the same everywhere; the operating yield must exceed interest rate used for financing. The problem is that right now, rents must be at their historic highs and vacancies, at their historic lows; see if you can find any information on what happened to rents and vacancies in Dubai between 1985 and 1998; this will give you some idea of what's going to happen to your property when oil prices fall.

The additional local quirk is that there are no mortgages in the Western understanding of the term. There may be three possible arrangements, (1) the lender acquires the property outright and sells it to you on an installment plan, (2) the lender acquires the property and you gradually buy him out, and (3) the lender acquires the property and leases it to you; title is transferred to you at the end of the lease term. In all cases, the lender's name gets on the title. You should check if this is going to create problems for early disposition.

Answer 2

If I were you I'd do it but with caution. Right now rents and property prices in general are at an all time high and most people are expecting them to fall soon once there's an oversupply. Also I'd be very careful about the developments you'll be investing in. Google as much as you can about the various developers and try and find one with good results to show. There are many false promises being made and also loads of delays in construction. If I were you I'd avoid Nakheel and Damac. Nakheel are the ones responsible for the palms and the stories about their delivery of their developments haven't been the best, also Damac seems to be launching a new tower every day but have hardly any results to show, their marina terrace tower apparently has terrible finishes and the pipes have burst twice flooding a few floors. If you look at their website, you'll see that the construction pics only show the exterior or the lobby but never the apartments, I wonder why :-).
In Dubai there's a lot of this dodgy business going on in the real estate market but as long as you do your homework you should be fine.

Answer 3

I think your question is too vague. You need to explain weather you primary objective is yield/development or appreciation. Do you have and bias against commercial property. What time frame are you panning on holding for? By the way mortgages are available. Be more clear I will be able to help you better

Answer 4

Growing So

Answer 5

Real good place... really gorgeous