Investment property in Dubai

[Rav]

As the UK heads for a credit crunch and crisis, i am looking at buying some investment property in Dubai.

Anyone here done this?

I was thinking about buying a small property (maybe a appartment or 1/2 bed flat) and renting it out for 50 weeks of the year. The remaining 2 wks would be a holiday for me and family.

My worries are:

1) So much property out there going up so quickly. Rental income on property must be low due to supply outweighing demand?

2) Current estimates are about 15% growth per annum on sums invested in property out in UAE. Obviously capital gains tax will apply when bringing my money back to the UK?

3) What are the purchasing legalites out there like? Risky?

Any help appreciated. I hope to take my 911 3.2 for a blast out there one day...

[aa2008]

I know a few people that have invested in Dubai.

They key is do your research when buying there. As you say there is alot of over supply there at the moment.

A mate of mine has bought an apartment around the new Dubai Land complex, which is not going to be finished for a few years but when it is there will be enough tourist to keep his property occupied.

Stick to places where there will always be a tourists or some one to rent.

Don't believe what the developer says, do your research.

And lets not hope war doesn't break out in the Middle East, then we're all doomed

[Rav]

Doomed alright.....Its the only place left in the world i would consider moving too.

[535dman]

Perfect timing for this post lads

Just got back from a holiday there - GREAT country and everything seems to be booming - housing, business, commercial property etc etc

I stayed in Dubai Marina which is still being developed. Its a 5 mins drive from the Burj Al Arab, Madinat areas and is mins away from the Palm Jumeirah. I could see the Palm from my apartment/hotel room.

I spoke to a couple of local people and the area's that are HOT seems to be Palm Islands, Dubai Marina, and City of Arabia - a new area close to Dubailand which will be Dubai's answer to Disney land.

I am currently looking in to investing there myself and will keep you posted on how i get on. In the meantime anyone know anything I dont please let us know...

Cheers

[Huliganov]

Dubai is going to become a victim of its own success I feel. Too much intra-state competition between companies will send prices down significantly. I've met people who stand to lose money if they sell their properties in the current market. Best to wait till the end of the year as prices surely will be driven down much like in many capitalist dominated markets

[dr matt uk]

I'd say you may be a bit late to make money here.

People I know who moved out there to cash in a few years ago. They are still there, but not investing their own money in Dubai anymore. Not now. Despite the air of productivity, there are a huge amount of unsold properties out there. And many, many building projects being given the green light which is adding to the over-supply problem.

And the foreign investment they are hoping to attract are the very people tightening their belts right now...

[jamoor]

personally i think it doesnt make sense.
They are attracting tourists and overseas business, so when the oil runs out, they have some sort of economy.OK.

How do people get there when the oil runs out?

[Andrew[MG]]

jamoor said:

personally i think it doesnt make sense.
They are attracting tourists and overseas business, so when the oil runs out, they have some sort of economy.OK.

How do people get there when the oil runs out?

and how do they pay to run their cities.....taxes UP!

[JustinP1]

Andrew[MG] said:

jamoor said:

personally i think it doesnt make sense.
They are attracting tourists and overseas business, so when the oil runs out, they have some sort of economy.OK.

How do people get there when the oil runs out?

and how do they pay to run their cities.....taxes UP!

Quite.

The 'locals' won't earn enough, to suffer the taxation so it will be the investors that are hit.

Its an interesting business model they have there, but it seems they are trying to build a business/tourism haven for the sake of building a haven to save their arses rather than it is a perfect geographical location.

It is not a co-incidence that the economic centres of the world, London, New York, Tokyo etc are on a very similar latitude in temperate zones rather than sweltering heat.

Edited by JustinP1 on Friday 11th April 12:08

[Andrew[MG]]

I had someone asking me about this today:

http://www.propertiesdubai.com/blumirage/register/index.asp 

£50k investment
12%PA guaranteed returns for 3 years
Won't be ready til 2010

I'd say it's a bad bet. What do you lot think?

[CHIEF]

I've a bad feeling about Dubai personally, i just dont think its all its cracked up to be.

Maybe i'm wrong but i think some people may get their fingers burnt.

Normally when the word is out like this its normally too late!

[NoelWatson]

Andrew[MG] said:

I had someone asking me about this today:

http://www.propertiesdubai.com/blumirage/register/index.asp 

£50k investment
12%PA guaranteed returns for 3 years
Won't be ready til 2010

I'd say it's a bad bet. What do you lot think?

If something can generate returns in excess of risk free rate there must be an element of risk. See AAA rated CPDO offering LIBOR +200

[Andrew[MG]]

NoelWatson said:

Andrew[MG] said:

I had someone asking me about this today:

http://www.propertiesdubai.com/blumirage/register/index.asp 

£50k investment
12%PA guaranteed returns for 3 years
Won't be ready til 2010

I'd say it's a bad bet. What do you lot think?

If something can generate returns in excess of risk free rate there must be an element of risk. See AAA rated CPDO offering LIBOR +200

I guess if you use a discount rate then the return wouldn't be as high as 12%. 2.5 years until you start seeing a return. I'm sure they can easily guarantee the return for 3 years, it's more a question of can you sell at a profit then.

[ALawson]

I have heard and read that Ras Al Khaimah will be the next big thing in the UAE. The development is going to more controlled and planned, thats not to say that Dubai isn't/wasn't planned. I was there for a week 2 weeks ago and I thought that the majority of the development out there was done pretty well.

I was staying with friends in Emirate Hills but we went around all the areas mentioned above in the thread.

The only thing that worries me about the UAE is the manner in which they can introduce new laws and legislation, normally to the benifit of the locals!

It isn't like it used to be between 1976 and 1988.

[mgp1969]

No way will RAK be th next big thing out here, anymore than Fujairah or Ajman. If you have to invest in the UAE (an I wouldn't, despite (or maybe because of) living and working here), Abu Dhabi is the only sensible option

[mgp1969]

Andrew[MG] said:

I had someone asking me about this today:

http://www.propertiesdubai.com/blumirage/register/index.asp 

£50k investment
12%PA guaranteed returns for 3 years
Won't be ready til 2010

I'd say it's a bad bet. What do you lot think?

I'm guessing the 12% isn't "guaranteed" or that if it is it comes out of an inflated purchase price - that tends to be the way of these deals

I am a firm believer that if something appears too good to be true (compare a 12% return with what you could elsewhere at the moment), you walk away