Dubai Property – What to Consider for Investors

With the World Expo 2020 drawing near, Dubai is coming under the global spotlight yet again. But what should overseas property investors consider when looking for Dubai property.

As always in the world of property, location can be key when looking for capital growth in investment property, and Dubai is no different.

Dubai continues to expand south and east towards the site of Expo 2020 and with the attention clearly due to focus on that area between the Shaikh Zayed Road and Emirates Road it could well be a location to consider.

Investing early in the right location can bring great rewards. Prices tend to be pitched lower than in established communities with properties in the first developments in Dubai South’s residential district priced as low as Dh280,000 for studio units and Dh480,000 for one-bedroom apartments.

Emaar South for example was sold out completely within hours of the initial launch.

Second phases are due to be launched in these locations along with further new developments in Eastern Dubai offering similar deals, though these tend to be for larger town houses and villas.

Bargains can be had in the new developments, with three bedroom town houses available in the new development of Mudon at around Dh1.4 million.

Similar properties in the more established residential area of The Springs now cost Dh2.5 million, having been available for around Dh 1.5 million at launch 7 years ago. An excellent return despite the downturn seen in the Dubai property market during that time.

It seems that smaller, more affordable apartments and villas are in the highest demand currently, displaying more flexibility in both selling and renting at the moment.

For property purchased in the correct up and coming new districts capital appreciation has been seen to achieve over 20 per cent per year as the new residential areas become more established.

With relatively low purchase prices, rental yields can also be strong in these regions of Dubai. Rents can often return a yield in double figures, usually ranging from 7-12 per cent for the right purchase.

The right location with room to develop is crucial to achieve the best capital appreciation and/or rental yield. So as well as visiting and studying the develop well, it is also worth consulting reputable local agents and property experts to get advice about the potential or the development and area of Dubai you are considering.

Dubai is a well established property market and, if embarking on a medium to long term property investment plan of 7-10 years, the general consensus is that with the imminent arrival of Expo 2020 there will be strong property value and rental growth over the next few years to ensure successful investment.