As one of the states which makes up the United Arab Emirates, Dubai is often assumed to be an oil rich state like neighbouring Saudi Arabia and the like.  It may surprise many to find that less than 3% of the state’s income is derived for oil revenues (indeed it is forecast that the countries oil reserves will run out within 20 years).  The state has however reinvented itself as a tourist attraction and service based economy.

The buildings of Dubai are some of the highest and most beautiful in the world, and the state prides itself on construction projects which seem to push back the boundaries of the construction world   Dubai also boasts the largest man made harbour in the world, which has helped to increase the amount of trade which moves through the area.

While there have been historical issues about humans rights and the standard of policing, these areas of society have very much improved of late,  However, it is essential that all foreign nationals respect the customs and laws of what is still predominately an Islamic state.  

This area of the world has become very popular with Expats living in Dubai and working for Western companies looking to set up branch offices in the area, or arrange trade paths.  It is seen as a useful door between the West and Middle East markets, which often have a volatile relationship. 

 Contents: Property Market Performance in Dubai | Property Costs in Dubai

Property Market Performance in Dubai

As you would expect from a state which has a population of less than 1.5 million, the property market can be somewhat unpredictable, and often volatile.  The area is a mass of ongoing construction projects, although many of these ventures have already been pre-sold or instigated by Western companies looking to house their workers in the region.

There are few places in the world like the Dubai property market, where prices are sky high yet the demand and inflow of immigrants continues.  The May 2002 law which allowed foreign investors to become more active in the local market, seems to have alerted many investors to the potential of the area.  There have been some very large property deals completed over the last few years, which have often restricted natural supply to the market.

While many of the population are buying their own houses in Dubai, a number are also looking at renting properties (with rent charges up by 30% over the last couple of years) which is in turn putting further pressure on the already sky high property market.  It is true to say that the property market of Dubai is still very much in its infancy, and when comparing prices against those in more fashionable areas of London, Dubai prices are often only 30% of the prime London property prices.  

Dubai is very much on the up, with masses of new property projects ongoing.  While there will be a requirement to slow the development down at some stage, now is not the time as demand is still far outstripping supply.  A useful investment for those looking to relocate long term, although the decision may not be as easy for those looking at only a short term stay.

Property Costs in Dubai

Dubai is a fairly unique country in that there are not really any direct taxes with regards to the property market (or indeed the economic market).  There is however the cost of appointing a representative to assist with the local laws and rules - a cost which can be negotiated at the time of appointment.