The Dubai Expat Diaries

In Dubai, there is a shortage of 26,000 apartments, condo’s (condominiums) and various other housing units, in comparison to the expected delivery of 40,000 units during 2006. This has resulted in rise in apartment and condo rents during the first quarter of this year, according to results of a new research.

Delays in key projects in Dubai meant only about 14,000 units were delivered. This demand-supply gap resulted in high apartment and condo rents. The rentals for two bedroom apartments in Dubai rose to eighteen percent during the first quarter of 2007, in comparison to the same period last year, says Asteco, a property management company.

For those interested in investing and buying appartments in Dubai and those with the capital to buy in Dubai, this is a very good investment providing possible high rental returns. The rental return on apartments is higher than most countries therefore making it a more attractive market to buy into.

However, a large number of apartment and condo projects are underway throughout Dubai - high rise apartments built to the some of the best quality in the world, are appearing all over the Emirate. The most recent increases are due to the supply, especially the best properties, outstripping demand. Should the new builds continue, this may reverse the process and therefore crush rental returns. However, what is more likely is that the rental returns will stabilize.

The government had also recently stated that housing rents had risen by fifteen percent in the UAE, with inflation touching 9.3 percent during 2006. The average annual rents for single, double and three bedroom apartments in Dubai were Dh.80,000, Dh.115,000, and Dh.140,000 at best during the first quarter.

Dubai Marina recorded highest and best rentals of Dh.110,000 to Dh.210,000 on average and rents increased by 20 percent during fourth quarter.

Villa rentals increased by fourteen to fifteen percent in Umm Suqeim quarter on-quarter. The rentals in Old Dubai were highest in Jumeirah 1, and ranged from Dh.270,000 to Dh.500,000. However, villa numbers are far less than the number of apartments and condo’s.

It is also interesting to note that due to the high rents, people working in Dubai are also looking for accommodation in nearby emirates such as Fujairah, Ajman and Sharjah.

Dubai apartments and condo’s have become a great investment opportunity. Over fifty percent of Dubai’s work force is non-nationals thus resulting in thousands of prospective tenants available for apartments and condo’s in Dubai.

The high standard the apartments in Dubai are built to mean that those wishing to live in Dubai should expect much higher standards of living. With this luxury lifestyle comes a luxury price tag not to mention affluent tenants unlikely to miss payments.

Apartments in Dubai range from studios to large 3-4 bedrooms. They also boast extremely spacious living, dining and kitchen areas. Crime levels are low and therefore vandalism is virtually unheard of in Dubai.

As an investment apartments in Dubai would be ideal for first time buyers looking for minimal risk. Dubai apartments and condo’s provide a rental return of up to eight percent – 6% is deemed to be excellent and a worthy investment in Dubai. There are several property agents who will arrange you rental collections and property maintenance.

The most in demand apartments in Dubai are in Marina beach and Dubai springs but new builds are popping up everywhere.

Steve Roberts is an advisor on Dubai Property investments and the general manager of Platinum Homes one of the largest and most successful property advisors and real estate companies in Dubai. He writes on the Dubai property investment market and is often requested to speak at property market events and provide industry commentary. Winning multiple awards for customer satisfaction and sales service Platinum Homes has assisted over 1000 customers to secure property investments in Dubai with returns averaging over 10% per annum. For more information visit Platinum Homes Dubai.