At the outset, let me apologize if this is a stupid question!

What is the average life of apartment buildings in Dubai? Due to the extreme weather conditions and corrosiveness, the average life is assumed to be 10 years for current buildings and generally buildings over 10 years are broken down to make way for new ones.
In that case, what will happen to the value ofthe current developments, especially for long term investors? Will the building value depreciate with each passing year after the 10th?
By the way, I have invested in a 2 bed apt at Jumeirah Village and am a long time resident in Dubai (over 12 years now); hence the concern.

[quote=gianne;4797]Positives
1. Very low rental tax of 5%
2. Low transaction costs at 8%
3. Potential for high yields
4. One of the most stable in the Middle East
Negatives
1. Unclear if aliens can rent out
2. Tenancy laws unknown

As you can see, the positives outweigh the negatives. But the negatives may mean a lot of difference for landlords, as iffy tenancy laws may always be the subject of rental disputes.


Hi ...
I am a new member and find this forum interesting. My two bits of research here:
Pros:
1. Demand for houses going by the number of ads and rental prices quoted.
2. Possible to get loans (depends on ur creditworthiness) to finance your purchase.
3. Repayment of the loan can be met largely from rentals, thus enabling one to restrict investment to the down payment only.

Cons
1. Residence visa is of three years durattion and renewable.
2. Visa is issued by developer. If you have problems with the developer, he may be able to cancel your visa.
3. You cant resell the property without paying a transfer fee to the developer.
4. The life of all buildings as per tthe building code is 25 years. This means after 25 years they demolish and your investment is then thin air only!


Would appreciate folks out there reviewing and 'critique'!

Ciao

So what is the laws provision in case of life time of a building is finished ? I mean what is in the law in case if developer decides to demolish the building after 15 years?

Nobody can say how the markets will move. Real estate markets tend to be cyclical. I just hope for everybodys sake that the markets will move up.

As they say, the early bird catches the worm. People who entered early can withstand the correction and still reap the benifits.

The markets are getting over heated. For eg, the current prices of 2800 dhs psf launched by Deeyar at Business Bay, is this price justified, I don't think so.

People who buy at these prices have to watch out where they are putting their money. But again, this is my opinion and I could be wrong.

As I said earlier, for everybodys sake including mine, I hope the markets move up.

Rgds

Roshan

Will a recession in the US which looks likely to happen affect Dubais property market?

No doubt Dubai is a growing and prosperous real estate investment market. But the biggest draw back with the country is its climate, besides the large number of immigrants.

I would say the climate is one of it best points.As for the immigrants,they are helping to make Dubai a great city.Without them and overseas investors Duabi would have a few hundred thousand population and a hell of a lot less monet invested for these amazing projects.

The BIGGEST risk in Dubai is the absence of a genuinely balanced Strata Law which allows the owners of freehold property to decide how their common hold property will be maintained and at what cost. The Developers like Emaar & Union Properties are ripping off the apartment owners.

Till now it seems the Developer has a free hand to fix maintenance fees. Example:The Greens where maintenance fees have gone from AED 7 psf to AED 20 psf in the last 3+ years.

Even if the owners of a building in say JLT or Marina decide to manage their own building the building owner association could receive an arbitary bill for maintenance of the "Lake" or Marina common areas.

Currently the residents of Green Community are given a sneak peek of supposedly "audited" expense statements in support of the maintenance fee claims. The reason for increase of most expense lines is "general cost of inflation". The invoices received are primarily from the sister concerns of the Master Developer.

Finally the District Cooling Costs are also totally arbitrary. My 3 bed apartment in Bur Dubai costs about AED 1.50 psf per year to cool. I fail to understand why tenants of the Greens pay AED 20.00 psf.

Is it the cost of maintaining the greenery? It cannot be. Fact is that Emaar's Meadows & Springs comprise 7,000 villa units paying AED 7,000 each. That's an annual total of AED 49.0 million from a 100 acres of land. The Greens on the other hand make up barely 3-4 acres and Emaar will end up with AED 49.0 million in fees from the apartment tenants of the buildings on these 3-4 acres.

hey gents
brand new to the forum, and love reading all the posts. a few key posters, such as Roshan, have stood out to have some good unbiased knowledge of the Dubai market.

as an outside potential investor, Dubai just makes sense. from my research (albeit in the infant stages) the potential to make money is fantastic, whether it be with pre-sale projects, or completed units that you can rent out. I love the fact that rental incomes can still cover your mortgage. That brings a huge smile to someone like myself who loves making money off leveraging (who doesnt? lol). Here in Vancouver, Canada you're lucky if you're getting 4% rental income.
I'm sure a lot of people in Dubai are probably thinking the market is at a ridiculous high, there's no way prices can get that much higher, but as an opinion, its still underpriced compared to the major world cities.

I think its still a good time to get in, and I plan to make a post asking the advice on where to purchase my first Dubai propery (i'm thinking the Marina. You always make money by the water! lol)

Hello there.

Tell me about it. Waterfront properties tend to do well followed by Golf course properties. Still little bit of juice left in Downtown and the shoreline apartments at the Palm for the bags of money owners ( Just imagine when the BURJ Dubai & Palm Jumairah actually blossom and come into the market. JBR should be in your list of consideration. Did not have a good opinion on JBR, but the nearness to the water could be a drawing point.

Dubai is still in it's stage of infancy, the reports are fantastic....but cannot be compared to major cities in the world as of yet ( this is my 2 cent opinion, I could be wrong ).

The rentals when compared to the money invested made sense a few years ago. One needs to watch out when investing now, the numbers should tally - OR -you end up in negative cash flow. I have posted an easy to use mortgage calculator, which gives you an idea.

Moscow, London, Mumbai, Hong kong have gone through ups & downs of real estate. Dubai is still an emerging market with a "build and they will come" attitude. Prices are really peaking and looks like an overheat.

With all market down, investors are now looking at real estate in emerging markets like Dubai creating a false boom. On the other hand the developers get excited and start raising the prices, looking at the flow of investors.

Does anybody know the actual price of real estate in Dubai...NO. What I have read in a few real estate books and correct me if I am wrong...in the US you can actually walk into county offices and get at what prices properties were sold previously and it can go back years & years, which gives you an idea how peoperties have been performing in highs and lows. Dubai is yet to experience this.

When you say 4% rentals in Canada. Are you talking of on current market pricing - OR - the price at which you bought ??.

Regards

Roshan