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Dubai property market: 2016 set for substantial foreign investment

Dubai property market: 2016 set for substantial foreign investment!

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Dubai property market: 2016 set for substantial foreign investment

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  1. PERSONAL BUSINESS TOOLS SUPPORT Sign Up Log In GET QUOTE  Home \ Personal\ Overseas Properties Dubai property market: 2016 set for substantial foreign investment ANALYSIS NEWSLETTER Subscribe Now February 23rd, 2016 Author: Natasha Wood RSS-Feed Related Articles 2016: A good year to invest in Spanish property?  How foreign currency movements can affect your overseas mortgage  How can I rent a property for long term abroad?  Tips for buying property in France  Popular Articles Over the last 13 year, Dubai’s real estate market has witnessed a level of foreign investment never before seen in such a short space of time. Brits have been at the forefront of that foreign investment, injecting up to DH10billion into the region in 2015 PDFmyURL converts any url to pdf!

  2. alone, (second only to Indians with DH20billion). Dubai’s property market, truly is international in its reach. Last year over 150 nationalities invested over DH135billion into the emirate’s real estate sector. Both the amount and diversity of international Dubai property market: 2016 set for substantial foreign investment  investment into the region are testament to the confidence foreign buyers place on rental yields (currently averaging at around 7%). Recent cooling measures introduced by the government over the last eighteen months, have seen both values and transactions, decline. In addition to this, many thousands of units that had been scheduled for delivery in 2015, but for a number of reasons were not, are now expected to become available in 2016. While the exact number due to be released, remains unclear, what is certain, is that any sudden increase in supply of units, will more than likely result in an overall reduction in property prices. This combined with the governments cooling measures, could see Dubai’s property market present some real investment opportunities for anyone on the hunt for some prime real estate in City Guides: Tokyo  the emirates. Some analysts have gone even further to suggest we may well even witness prices close to bottoming out, and while this may be a slight exaggeration, there is no doubt that 2016 has the potential to be a great year for investors. With this in mind, we thought we’d offer some insight into what 2016 potentially holds in store for Dubai’s residential sector. Stability in Dubai’s Property market? Despite an unwelcome degree of uncertainty and volatility in recent years, residential property prices are currently holding up a lot better than some had feared, with the price of oil down by more than 70% since June 2014. Dubai’s government, PDFmyURL converts any url to pdf!

  3. certainly appears to have learnt the lessons of the past and imposed some prudent regulatory measures which appear to have provided sufficient support to the property sector this time. The fact that we are seeing a stabilization in property prices despite oil prices remaining well below the global average, suggests that the residential sector has acquired an increased level of maturity and resilience. Central to this maturity, has been the diversification of the emirates economy over the last decade. Dubai’s (and indeed the UAE’S) economy, is no longer entirely interdependent on oil, and as a result, considerably more resilient to any adverse movements in its price. The government has substantial financial buffers to ensure that investments in infrastructure and additional critical projects remain on course. The impressive emergence of other non-oil sectors continue to grow, with particular investment opportunities in education, logistics, retail, renewable energy and high- tech manufacturing playing an increasingly prominent role in Dubai’s economy. As a result, what we have seen, is a growing degree of optimism and assurance that the residential property sector now has a durability that it previously did not have. Such developments have detached this once vulnerable sector, from the global pressures it was once so inherently exposed to. Strong rental yields The dramatic increase in Dubai’s population, combined with its growing job market, helped deliver pretty healthy rental yields for investors last year. Prime property in particular performed very well, offering yields of 7.8% (up 0.6% from 2014). The UAE has a foretasted population growth of 20% by 2030, with Dubai expected to absorb a PDFmyURL converts any url to pdf!

  4. sizable portion of that increase. The OECD predicts a 4% growth rate for the emirate in 2016, and these factors combined, suggest a highly favourable ROI for investors. With demand still exceeding supply for rental property in Dubai as the population continues to rise significantly, we can expect rental yields to remain fairly stable. Though naturally, areas like Downtown Dubai and Dubai’s Silicon Oasis are likely to deliver even stronger yields as a result of their increasing popularity. Expect increase in Chinese Investment With a rapidly increasing number of wealthy Chinese looking to diversify their investment portfolio, it’s no surprise that Dubai, with its healthy ROI in residential property, is proving an increasingly popular destination for this affluent group. A survey conducted by juwai.com (a Chinese property portal) found that in September alone, there was a 1200% increase in interest for properties in Dubai. It’s clear that Chinese buyers looking to move beyond the traditional property investment destinations of Hong Kong, London, Sydney, New York and Singapore, see Dubai as ideal addition to their portfolio. Such is the scale of this investment that the Chinese population in Dubai has apparently now grown by 53% in the last five years alone from 150,000 to approximately 230,000. As Dubai solidifies its position as a prime location for Chinese investment, this will inevitably translate into more demand from China, bringing ever more investment into the region. Areas of interest for 2016 PDFmyURL converts any url to pdf!

  5. Dubai’s metro route 2020 extension is due to begin in April 2016. The new metro link will dramatically extend Dubai’s transport network, connecting an increasing number of communities with growing high density populations. Such communities include Discovery Gardens, Al Furjan, Jumeirah Golf Estate and Dubai Investment Park. Overall, the route extension is set to serve an estimated 240,000 additional residents, providing significantly improved inter-connectivity throughout Dubai. Naturally, residential property within these regions can expect to see a positive impact in terms of overall valuation. Any consideration for investments should factor in Dubai’s ongoing and ambitious infrastructure projects, as these will invariably impact the areas they serve. In terms of new, up and coming areas, Mudon looks set to grow in popularity. It’s an attractive location, with a large number of villas soon to be available on the market. Mudon as a capital investment will also benefit from the large mall due to open in 2016, as well as a number of new roads and infrastructure projects which have recently been approved. Secondary Areas including Sports City, Motor City, Jumeriah Village Circle and Silicon Oasis proved fairly solid investments in 2015 with increased transnational levels and stable yields. Buyers very much appear to be increasingly looking outside the prime areas for higher yielding, cheaper alternatives. This being said, areas such as Dubai Marina, Downtown Dubai and Palm Jumeriah could see dramatically improved rental yields and capital returns in 2016 should foreign investment continue at its current projected levels. All things considered, while the jury may not be entirely out, 2016 does look set to be strong year for Dubai’s residential property market. Yes, the plummeting oil prices are far from welcome news to investors and owners alike, yet Dubai’s property sector has shown impressive resilience thus far. If, as a growing consensus appears to PDFmyURL converts any url to pdf!

  6. has shown impressive resilience thus far. If, as a growing consensus appears to believe, we have seen a bottoming out of prices, it’s well within the realm of possibility that 2016 could be a huge year for foreign investment moving into the region. A rapidly growing population, expansive new infrastructure projects, and prudent cooling measures undertaken by the government should, at the very least, see stability ensue. Share FACEBOOK LINKEDIN TWITTER GOOGLE+ About the Author Natasha Wood Content Marketing Executive FCA and HMRC authorised and regulated POPULAR CONTACT US PDFmyURL converts any url to pdf!

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