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Dubai… A great place to live and property investment!

The Dubai Properties and Real Estate Blog is a resource center for international property investors. Being the commercial hub of the Arab world, Dubai saw property boom since 2002 when the government had permitted foreigners to invest in Dubai properties in order to boost Dubai and as well as the whole UAE real estate market.. For a few years now, some have been saying that the Dubai property bubble was about to burst and that a property crash was just around the corner. Yet, prices kept increasing and such doom mongering proved unfounded. The Dubai property market is unique in many ways, and as such doesn’t follow the general rules of other property markets around the globe and other Middle East property markets. The current rate of return on UAE property investments is in the region of 10 – 15 percent per annum, with this rate expected to continue for the foreseeable future, and rental yields in excess of 10% are further evidence of strength in the property market. The growth in the tourism industry of Dubai has been phenomenal with the 3.4 million visitors in 2001 expected to rise to over 6 million in 2010 – from a standing start the area is becoming a magnet for overseas visitors. Many of Dubai’s property developments set out to emulate the most prestigious residential addresses in the world. However, the less glamorous middle-income gulf or Middle East real estate market is increasingly drawing the attention of savvy investors. Dubai Properties is one of the biggest and has said it will deliver 5,000 units to the freehold market in 2008 which is not nearly enough to meet surging demand. Abu Dhabi property market will not deliver a single new real estate unit this year, and deliveries will only start late in 2009, and that creates additional demand in Dubai.

The Mediterranean island of Malta has recorded the strongest growth in property prices from countries in the European Union, and recent news could help see property inflation in double figures for the next few years. Malta is not only a tax efficient location with beautiful costal properties for sale or rental, but its warm climate, beautiful sea and days full of sun will help you relax and retire in a friendly and safe environment for Mediterranean property investment. Sustained property inflation at levels seen in Malta are rarely seen in other countries, but new economic activity on the island could see property demand at good levels for some years to come. The introduction of low cost flights to Malta from the UK will open up the possibility of more international real estate investors looking at the island for holiday homes that could be used for long weekends, and the Malta hotels industry could reap the benefits of the 3 and 4-day tourist seeing the island as a viable place to visit. After some years of wondering how Malta property market would fit into the modern world, property agents, hotel owners and the Malta holidays industry are beginning to see the future with some optimism.

Due to the gains in housing equity in the past 20 years, more people have been seeking to invest in housing, rather than other forms of investment. In the UK there has been a rise in the number of private buy to let investors. Similar to an increase in the buy to let sector, there has also been an increase in demand for houses from oversees property buyers. This has had a significant effect in boosting real estate demand, especially in London. In terms of land mass the UK is an incredibly small country yet it attracts amongst the highest levels of immigration in the world. the supply of property is always restricted in the UK and that exaggerates price swings and ensures a recovery. Those more patient buyers from Arabia will find themselves well rewarded.

No surprise – Monte Carlo is No 1 in the Global Property Guide’s list of World’s Most Expensive Residential Real Estate Markets 2009, more than twice as expensive, at US$45,000 per square metre, as the runner up. [www.globalpropertyguide.com]

Battling for the number 2 position are prime central Moscow and London. Prime central Moscow’s US$20,853 per square metre price tag slightly outpaces core Prime London’s US$20,756 per square metre, though it is fairer to say the two cities are neck-and-neck.

London residential property prices have fallen for much of 2008, while Moscow property price declines only started in the last quarter, allowing Moscow to catch up with London. Both countries have experienced strong currency declines.

Tokyo and Hong Kong come in fourth and fifth, respectively. New York, the only US city included in the survey , is 6th, with an average price of US$15,000 per sq. m. Completing the top ten most expensive real estate markets are two European cities (Paris at 7th and Rome at 9th) and two other Asian cities (Singapore at 8th and Mumbai at 10th). Average prices range from US$9,000 per sq. m. to US$12,000 per sq. m. The figures are based on the average price of a 120 sq. m., good-condition high-end used apartment in the city centres of more than 110 cities around the world, typically the economic centres where most foreigners are likely to buy. Data were collected during 2008. The US dollar exchange rate used is that of January 27, 2009. Bargain hunters’ dream For global bargain hunters, there are several places where property prices are relatively cheap, for example parts of the Middle East, Latin America and Asia. Cairo, Egypt is one of the cheapest cities in the world, with prime city centre prices at around US$600 per sq. m. Another Middle Eastern capital in the bottom 10 is Amman, Jordan, with average city centre prices at US$1,150 per sq. m.Three Asian cities are included in the 10 cheapest, all located in rapidly growing and heavily populated countries, Bangalore in India, Chengdu in China and Jakarta in Indonesia. Chengdu, damaged during the magnitude 8.0 earthquake in 2008, remains a vital economic, transportation and communication hub in the heartland of China. Indonesia was the last country to recover from the 1997 Asian Financial Crisis. However, the economic reforms implemented by the Yudhoyono administration are setting the stage for steady economic growth. Five Latin American cities complete the list of 10 cheapest cities for property buyers – Concepcion and Santiago in Chile, Quito in Ecuador, Managua in Ecuador, and Lima in Peru. The same countries also tend to earn good rental yields. OvervaluedRental yields are generally below 5% in most European cities, suggesting that property is still overvalued. Rental yields are generally below four percent in the following cities: Munich, Barcelona, Vilnius, Helsinki, Madrid, Rome, and Nicosia. Rental yields in Europe are lowest on Andorra at 2.2% and Athens at 2.7%. Rental yields are between 4% and 5% in major cities such as Brussels, Tokyo, Berlin, Moscow, Copenhagen, Warsaw, New York, Shanghai, Paris, London and Geneva. Returns from rental investments are also relatively low in key Asian cities such as Singapore and Hong Kong and in almost all Indian cities (Bangalore, New Delhi, and Mumbai)Only six cities have rental yields of more than 10%, led by Chisinau with an average gross rental return of 14%. The Moldovan capital is followed by Cairo, Jakarta, Manila, Skopje and Lima. High returns can also be expected in Latin American cities. Yields range from 8% to 10% in Panama City (Panama), Bogota (Colombia), Managua (Nicaragua), Santiago (Chile), Buenos Aires (Argentina), and Quito (Ecuador). Rental yields in Kula Lumpur (Malaysia) and Amman (Jordan) are also typically above 9%. House price movements The recent house price boom and bust defeats the traditional notion that real estate prices are based primarily on local conditions. The relatively low cost and ease of moving capital around the world has made it easier for people to invest in real estate markets in several countries. This is complemented by the relatively lower cost of international air transport. Several countries have also removed foreign ownership restrictions, a move encouraged by the Organization for Economic Cooperation and Development (OECD) and the European Union. The result of these changes has been a remarkable increase in cross country real estate investments – helping make the boom, and the bust, truly global.

——————————–Description: The Global Property Guide is an on-line property research house. Terms of Use: On-line newspapers, magazines, sites, etc wishing to use material from this press release MUST provide a clickable link to www.globalpropertyguide.com Sites and newspapers found not to be providing a link to us will be removed from our press list. Requests for Comments:Requests for comments are best made by telephone to +(63) 917 321 7073. UK-based callers should telephone before lunchtime. Our local time is Hong Kong time, i.e., standard time + 8.00Economics Team:Prince Christian Cruz, Senior EconomistPhone: (+632) 750 0560Email: prince@globalpropertyguide.comPublisher and Strategist:Matthew Montagu-Pollock Phone: (+632) 867 4220 Cell: (+63) 917 321 7073Email: editor@globalpropertyguide.comAddress: Global Property Guidehttp://www.globalpropertyguide.com 5F Electra House Building115-117 Esteban StreetLegaspi Village, Makati CityPhilippines 1229info@globalpropertyguide.com

Review

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