According to Principal International, one of the UK’s largest overseas property investment companies, that the property market in Dubai presently remains on growing. Director of Principal International, Simon Ryeland says, ‘‘with rents and property prices expected to surge in 2008 with the explosion of investment banking, and oil prices at an all time high, there is no sign of the market slowing down.’’ .
There is speculation of a enormous focus on developing the financial sector in Dubai, and with it will come the investment bankers who are willing to pay the highest rents for the best property in town. For property investors in the luxury end of the market this brings welcome news especially if the rent capping agreements are not renewed for 2008.
Despite the predicted doom of oversupply, there is continuing evidence that demand is outstripping supply even with the high volumes of completed property coming to the market in 2008. Another factor influencing rising property prices is the falling cost of mortgage finance which is heavily influenced by the predicted interest rate cuts in the United States.
“With inflation topping 10-15% in Dubai, the property market boom is expected to continue for at least another 12 months and likely to be longer than that” says Simon Ryeland. Experts predict that prices can be expected to rise as high as 20% in the coming months caused predominently by the under supply issue. A leading developer says that there is a shortfall of approximately 20,000 units in 2008 alone.
The massive 10 year development programme to increase tourist attractions is fuelling tourist numbers and is said to generate $1.9 billion of economic activity, alongside this is the growing business community which further adds to the demand for rental property.
In summary, Dubai is a country worth investing in, its outlook is very encouraging, growth is set to continue and do not forget its tax free environment makes it a worthwhile investment.
