The Dubai property market - what are the prospects for Dubai apartments and other properties?
The Dubai property market is less than five years old. In that time properties in Dubai have soared in value and rental prices have gone through the roof. Is this trend set to continue or is the performance of the Dubai apartments you have been eyeing up set to suffer in future?
Not every multi-million dollar development of Dubai apartments has performed to the same extent and some properties are lying empty. However, this is the exception rather than the rule as demand for quality properties in Dubai is currently outstripping supply.
Unsure about buying but cannot afford to rent properties – Dubai’s current situation
The Dubai property outlook is good for those who have already bought and for those looking to buy soon. If you are looking at renting properties in Dubai then the forecast is less promising – rental prices rose by a staggering 40% in the first six months of 2005. Those planning on living in Dubai for any length of time have therefore been turning towards buying as a means of securing their Dubai apartments.
The numbers of new residents continues to rise and is expected to do so until the end of 2007, meaning the supply of Dubai property will remain limited. There have also been serious construction delays on some large-scale developments. This is good news for those who have already entered the Dubai property market and who may be enjoying both high capital gains and skyrocketing rental income.
So I cannot lose if I buy Dubai apartments?
Not quite. As we have already noted, for reasons of location, cost or design, it has been hard to sell some properties. Dubai is on the cusp of the supply/demand balance shifting with massive development underway across the city. New housing developments are announced weekly although supply is unlikely to come anywhere near meeting demand until the end of 2007 at the earliest.
In Dubai, construction has begun on some 80,000 properties. Dubai will see a slowing down of the entire market when these are completed. This situation is not expected until late-2007 however, so investors can expect good strong returns until then.
Dubai apartments and other types of Dubai property
Completed Dubai apartments are currently the most in-demand type of property in the city. Lengthy delays in completing large-scale developments have meant demand for Dubai apartments ready to live in far outstrips supply.
Overseas interest in the Dubai property market is turning to villas and townhouses as well as family-orientated developments. The price of villas rose between 20% and 50% in 2005 in some parts of Dubai and amongst foreign investors the emphasis is increasingly turning towards quality developments offering long-term potential.
The future for properties in Dubai
If current building trends are maintained then demand for Dubai property will be eradicated in the near future. It is only now that long-term prospects are becoming clear for properties. Dubai continues to grow and how the glut of new Dubai apartments and other properties perform largely depends upon how far this expansion continues.
Now that the initial frenzy of a new and exciting market has calmed, investors are starting to consider factors which will affect the long-term price rises of Dubai properties. Dubai will see the types of property in demand shift within the next few years. Whilst Dubai apartments will continue to make profits for some, villas and houses with gardens, parking spaces etc will grow in attractiveness to buyers of Dubai property.
