Hi All,
Has anyone looked at UAE?
I have been looking at it for 2 weeks now.
Some properties are yielding 25+%.
Anyone have any pearls of wisdom?Frank
I was in Dubai just last week….
I personally think Dubai property will crash and burn very soon… i wish i could fully make you understand how fast they are putting up sky scrapers there.
one development underway will have 40 (yes 40) hi rise apartment towers as well as business centres and the usual shopping facilities.
this one development is said to be able to house 120-150 thousand people.
the popoulation of dubai is a little over 1 million, yet i assure you there are over 100 sky scrapers being built that is meant to be mostly residential…. how can a city build to such an extent assuming that its population will instantly double or tripple within a few years.
the only problem is…. well when i was there the place where people would generally congregate were EMPTY! shopping centres, the undercover souk development next to the huge sail looking hotel. all full of nice fancy shops full of nice fancy products with shop workers standing around all day staring at the odd tourist who wishes to escape the heat for a while.
The situation in dubai is like giving a child 100 dollars to play with.. they will go out and buy 100 mars bars, even though they only need 2 to satisfy their hunger.
Dubai has some filthy rich kids with nothing better to do than build sky scrapers for fun, and they are going up…
hundreds at a time, honest there are whole suburbs of sky scrapers being build right now…
dubai gets only 10%of its income from oil as well… what will happen when it runs out???? i think they are just hoping that enough huge multi-nationals invest enough there to maintain it as a business centre….
40% of dubai’s income is from tourism, so keep that in mind.
cheers!
Jason
Frank,
I have to agree with the general sentiment of comments posted by Jason. I am originally from Sydney, but have been living in Dubai for nearly a year now. On paper it looks like a no-brainer – with rental yeilds at around 10-12%, it looks like an easy decision to invest here. However the amount of projects in the pipeline is just phenomenal, and it’s such a new market here, it doesn’t have the history that the property market has in Australia (eg. in Australia you can be pretty confident that if you buy the right property you can get at least your average 7%p.a. growth on average). Whereas in Dubai, everything has been built in the last ten years.
And another important aspect of the market here is that there doesn’t seem to be the rigour that there is in Australia regarding project feasibility – developments are built for reasons other than economic – eg. for status, money laundering, etc. That means you get a market that may be artificially inflated – it is not driven by market forces only.
The market here is not very transparent either. To get a good deal, it’s all about who you know.
And one more thing, it’s a very fragile market here. You never know what will happen in this crazy world. In the Middle East, Dubai is regarded as one of the most politically stable countries, however look at Lebanon, it was the “Paris of the Middle East’, regarded quite safe – no one predicted what is happening now. If a terrorist attack or something happened in Dubai, I don’t think it could recover.Dubai is an awesome place, but to invest here would certainly be a gamble.
Sarah
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