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Plaudits and pessimists alike have eyes firmly fixed on Dubai

24th October 2008 Print
Dubai property Plaudits and pessimists alike have their eyes firmly fixed on Dubai! With world property markets slumping and the ‘R’ word on the tips of everyone’s tongues, just what will happen to this property oasis?

Oliver Hickey European Sales Director of Profile said, “Dubai certainly has the world’s attention! Lets be honest, Dubai has always been a bit of an attention seeker but suddenly the international audience it is playing to has grown significantly, with many in the crowd waiting in trepidation, even with glee in some cases as to just how this pioneering giant will react and cope against the prospect of a global recession. This is Dubai’s judgement day and now more than ever before it is in the full glare of the international community. So will Dubai be a hero or a zero?

Well, let’s put everything into context. Is the world in a recession? Not yet. Will it be soon? Hard to say! Ultimately we hold our destiny in our own hands, less talk of ‘R’ and a more united front would do wonders for the world, but too many of us prefer to bathe in our own misery. What I can say, is that Dubai will stand tall and its strength will be like a beacon to all property markets that are currently facing a slump.

The news: its business as usual; the changes in Dubai will be minimal. Will you still make money? Yes. Let’s look at the facts. Prices in Dubai have risen by 14.4% in 2008 against official expectations of between 5% - 10%. Dubai continues to be one of the strongest investment markets around and although there will undoubtedly be a slow down due to a global weakness, investors will still achieve capital appreciation and with a spiralling population, rental opportunities are high and ultimately there is an exit strategy.

The two most significant changes in Dubai this year have been RERA and Escrow accounts. RERA was set up by the government as a regulatory body to govern all aspects of property sales and development. All developers now have to adhere to strict rules which ultimately safeguards investors in the region. No other international community is as heavily regulated as Dubai and as a result it has had a cleansing affect on the market with many developers been unable to meet these new strict criteria’s. In essence only the strongest developers have remained and these wealthy few are able to develop their projects comfortably without financial restraints until development profits are achieved 24 months down the line.

To summarise, Dubai will more than survive. Sales continue at a heady pace, rental yields will stay at a steady 12% and the 20 year master plan to create this sprawling desert metropolis will continue. Already 8 years into the plan and all of Dubai’s vital signs are in peak condition.”

One bedroom apartments at Zero Five Zero start from £400,000. There is a £4,000 deposit and admin fee due on reservation, followed by 20% within 30 days (less deposit) 20% in December 2008, with the balance (60%) due on completion in 2010. Rental yields are expected to reach 12% annually. Profile Europe (UK) Ltd is currently in negotiations with financial institutes to provide purchasers with an option for financing the 60% balance payment.

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Dubai property