I think the investment opportunities that are springing up overseas are exciting opportunities, not only to make money but also to have some fun as well. The golden rule applies, however. No matter how tempting it is to buy your dream home in the sun, make sure you do your homework – after all it’s your precious money that you are playing with. Always be safe rather than sorry. That doesn’t mean to say you can’t take risks, just make sure they are calculated ones!
Investing In Dubai
It’s impossible to ignore the fact that Dubai has now emerged onto the property scene. In the next five years the city-state of Dubai will become one of the largest construction sites in the Middle East. There are plans to build the largest skyscraper in the world, the Burj Dubai, along with golf courses, hotels, apartment blocks, water-parks, cinemas, sports complexes and marinas. Dubai is the only place in the Gulf where freehold property can be purchased. By 2008 it is predicted that there will be 200 new skyscrapers and 250,000 new homes built in Dubai. Once famous for its pearls, Dubai is now emerging as one of the fastest growing tourist destinations in the world.
The Man Behind The Plan
Sheikh Mohammed bin Rashid Al Maktoum is the Crown Prince of Dubai. Just under two years ago, he opened the gates for foreign nationals to purchase freehold property in Dubai, making
it the only region in the Gulf where property can be owned by westerners. Oil, which was discovered in the Arab emirates in 1966, is expected to run out in the next 20 years and Sheik Mohammed has decided to re-invent the country as a leading tourist resort. Last year 3.5 million tourists chose to holiday in Dubai, and out of this number 300,000 were from the UK. This number is expected to rise by 20% over the next few years.
Shortage Of Beachfront
Dubai has a shortage of beachfront and, in order to circumvent this problem, man-made islands in the shape of palm trees are being built, which will extend beachfront property. The current availability of 60 kilometres will be expanded to over 200 or more kilometres of seafront real estate. The Palm Jumeirah is currently beginning to emerge from the Gulf and scheduled for completion in 2005, with its sister island, the Palm Jebel Ali (not yet visible), scheduled for completion in 2006/7. The construction of the two Palms to ground level will cost in the region of £2billion per Palm. The plans for each of these man-made islands include 2,400 proposed shoreline apartments and villas, 40 hotels, marinas, restaurants and cinemas. There are further plans to build yet more artificial islands in the shape of the globe.
Dubai: Key Facts
- Part of the United Arab Emirates.
- GDP: £1 trillion.
- Over one million additional people will be living and working in the Jumeirah, Umm Suqeim and Jebel Ali districts by 2010.
- Literacy rate is 78%.
- Passenger traffic through Dubai Airport rose by 18% to 16 million last year.
- Key industries: international trade, manufacturing, finance, tourism and property. The four ‘free zones’ – Jebel Ali, Dubai Airport, Dubai Internet City and Dubai Media City – are home to more than 3,000 companies.
- Oil and gas form 10% of GDP.
- GDP growth rate: 2.4%.
- Currency: the UAE dirham is fixed to the US dollar, so property prices fluctuate with the pound-dollar rate.
- Mortgages: from major banks including HSBC, with interest rates linked to the UK.
- Visas and residency are issued to new owners and immediate family. They can be renewed every three years for a fee. The owner must visit Dubai at least once every six months to continue to qualify for residency.
- Climate: October to June is warm to hot with little rainfall. The temperature in the summer months can reach an uncomfortable 50°C.
- Languages: Arabic and English.
- Flights: BA or Emirates, seven hours from London. Also flights from Birmingham and Manchester.
- Population: 1 million and continuing to rise. 30% Dubai nationals, 30% Europeans and 40% from the subcontinent.
- All properties can be rented or re-sold. There are no local taxes to pay when you buy or sell, although you may be liable for taxes in the UK on rental income or proceeds of sale.
- Alcohol is permitted.
- Western dress is acceptable for women.
- Major developers are Nakheel (government owned), see www.thepalm.ae; Damac, see www.damacproperties.com; Emaar, see www.emaar.com.