• Dubai is presently undergoing a real estate price correction while still showcasing the same growth potential as before the recession.
  • Property prices are inexpensive in comparison to other similar trading hubs around the world. There is a potential for further growth, as prices have grown by 10% in demanded projects from 2011.
  • The total value of real estate transactions in Dubai for the first half of 2013 was AED108 billion from 30,469 transactions, an increase of 30% from the same period of 2012. Investors are once again showing confidence and are willing to capitalize on opportunities.
  • Property is a good hedge against inflation. At such times the higher cost of debt servicing can usually be pasted on in additional rent, while the value of the property inflates and its debt stays unchanged.
  • Rental income from property is a stable source of income. Good investment properties in Dubai offer 8-10% rent returns (after deduction of maintenance fees).
  • Real estate always has a residual value, although prices can certainly fall as well as rise. But property values will never fall to zero unlike shares and hedge funds.
  • Investors typically have more control over the nature, timing and size of real estate investments. This is partly because they are tangible and easier to understand, and diversification is readily available in the form of different types of property.
  • Dubai property is open to any investor from anywhere in the world, unlike the local stock market. This means greater liquidity and more funds in the marketplace.
  • Demand for property typically picks up during an economic boom or easier mortgage acquisition through Banks. Dubai banks have started lending again, and the number of finance purchases has increased significantly since 2009.
  • Real estate is always an excellent collateral security against loans, and allows debt finance to be secured at the best rates.
  • Property portfolios offer great scope for diversification of risk into different property types, locations and rental levels. This helps to spread the risk of an interruption to income flow.

Final analysis – Investor confidence is back and is evident in how property sales in Dubai have increased in the first six months of 2013 compared to the same period a year ago. The price correction has happened, property legislation is in place and Dubai is back to driving the international property market, with all eyes on the emirate.