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Dubai real estate market
By hassan Morcel
Much has been said about the phenomenal growth experienced over the past few years in the Dubai real estate market. Most that arrive in Dubai pontificate as to why the market does not operate on traditional real estate fundamentals and how it must be then set for a bust.
Contrariness seem to focus on the uniqueness of the Dubai market and stress the out of the box components such as population growth that is 3-4 times that of other developing cities around the world. Additionally the high yields achieved by investors presently 6-7% for long-term rentals and 12-15% for short-term rentals seem to justify the further capital appreciation in the market to reach the traditional lower yields achieved in more mature markets.
Is Dubai still a comparatively good value versus other markets? Let's take Singapore as an example. The average villa price per sq ft in Singapore is 1,050 AED and the average price for apartments is 1,350 AED per sq ft. Both Villas & Apartments in Dubai are on an average 10-30% below those #'s and be a similar regional hub would point to further potential appreciation in Dubai.
Another component driving Dubai real estate is high hotel prices and huge corporate and holiday rental demand for shortstay or short-term rental options. Many Dubai investors are finding that shortstay renting produces much higher than average returns and given average hotel rates of $232 US per night the demand is pushed to find alternatives.
What does this mean for homeowners? Traditionally those that bought for investment would either sell at a profit or rent it on an annual basis. Presently Dubai long-term rental returns are achieving 6-7%. The short stay option which caters to both corporate and tourists alike provides a higher annual return albeit with a slightly different risk.
The advantages include;
1. Ability to use it for personal use or friends
2. Returns that are roughly twice the average of long-term leasing
3. Flexibility to change in a fast moving Dubai rental market
About the Author
Article Source: http://www.simplysearch4it.com/article/45484.html
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