Sunday, May 23, 2010

Why We Should Continue to Invest in Dubai

Why We Should Continue to Invest in Dubai 


Dubai has been buffeted by the winds of change in recent months. Ill winds they were too, bearing no good tidings for those who had invested in real estate. As projects were stopped in mid-stream, thousands of workers and expatriates left the emirate in haste. Ancillary industries such as entertainment, shopping, dining and other have also felt the hit of this change. More realistic sellers in real estate have realized that they would have to lure buyers by offering easier installments or rents or prices to let deals get through.
Now that the Dubai World debt issue has been settled for the time being, attention is once again directed to the uncompleted structures of this sky city. By recent estimates, some 67 percent of projects have resumed and are ongoing in the emirate, while the remaining suffer from neglect, mismanagement, lack of capital or worse. It will definitely be in the Government and Dubai’s interest if these projects were resumed as well. The banking sector needs to create a favorable climate so that credit is easier to get and funds can once again be borrowed and applied towards the completion of projects. In some cases, mergers or acquisitions may be necessary among real estate firms to get the required strength in finance or management in order to carry on.
Others have noted that some firms are disillusioned with the way the emirate has handled the Dubai World issue, and are shifting operations to Abu Dhabi, Saudi Arabia, Sharjah, Qatar and Bahrain- where they see conditions as more stable and greater protection and profits for their investment. Indeed there are those who think that Dubai has over invested in just one or two principal areas- like hotels and convention centers- and think that with the oversupply all in one place, there will be high competition and a dilution of profits in the future. There certainly appears to be some logic in this contention. One does not need to actually count the number of developmental properties in this area to see that there is definitely an oversupply of some magnitude. The Asia-Asia Hotel project itself is rumored to have 6500 rooms- and if that is only one hotel, what about the others? One does not really see Dubai as a convenient location for an international stopover by tycoons and corporate businesses. That said, it just may function as a good convention center. Dubai definitely has all the technology, administration and infrastructure to function as an offshore convention center for international and regional conferences. But beyond that it is questionable whether investment will continue to flow in. Foreigners who came in to Dubai on a three year visa and invested in the emirate as a summer location away from home have been in for a rude shock, or series of shocks as the value of their investment has been constantly diluted by recent events. Some will undoubtedly look to recoup their investment when the market comes up in 2011 and are looking to get out then.
At the moment, rental property in Dubai is highly affordable as the exodus of migrant workers in the last wave has shocked owners into more reasonable offers. To rent apartment Dubai or rent property Dubai is the easiest thing to do with Dubai property these days. What is more challenging is finding villas to rent in Dubai in terms of rental property in Dubai as these demand some of the highest rates.
All this leaves the Government and the private sector with no option than to make conditions more amenable for investment in Dubai Holiday Rental or Dubai Real Estate. If they have a comprehensive plan with zoning so that population in one large area is served by the shops and establishments in that area, then no one would have to go very far for the daily conveniences of life. Respect for human and property rights and enactment of laws are needed if investment is to be attracted to Real Estate in Dubai. Apart from sales and purchases of Dubai Beach Property, the future of UAE Real Estate is at best uncertain at the present time.
(ArticlesBase SC #1674531)
Daniel Marshel - About the Author:
Author Bio Daniel Marshal is one of the most famous Dubai Properties opinion makers associated with Better Homes, a leading real estate firm in Dubai. He deals in buying and selling of commercial and residential property in Dubai and communities like Dubai Marina with special emphasis onrent apartment Dubai. Daniel’s firm also offers online real estate services in Dubai.
Source:  http://www.articlesbase.com/real-estate-articles/why-we-should-continue-to-invest-in-dubai-1674531.html