The recent history of Dubai has seen a fascinating transition from regional trading port to the city of the future which we see today. Where once sand and desert lay, Dubai is now one of the worlds most futuristic and progressive cities with one of the world’s most active real estate markets.
The main turning point for the Dubai property market was in 2002, when it was made legal for foreign nationals to own property in Dubai on a freehold basis, something which was not previously available. An integral part of Sheikh Maktoums ‘Vision of Dubai’ this change in real estate legislation was seen as an active encouragement to the international investment community, who took up the offer in considerable numbers. In 2006, the changes of the land law in the Emirate allowed foreign nationals the right to register their freehold property which proved to be a genuine catalyst to large amounts of investment into the Dubai property market.
As well as the changes to real estate legislation, the authorities in Dubai have looked to attract considerable overseas corporate investment in the region via the creation of a highly attractive set of commercial incentives. The creation of these free trade zone environments proved highly successful, and resulted in large numbers of companies relocating to Dubai to advantage of the favourable taxation and trading environments on offer in the emirate. Today, there are over 20 world-class free zones in Dubai including the Jebel Ali free zone and Dubai Media and Internet City. These free trade zones offer companies relocating to Dubai a range of commercial benefits including 100% foreign ownership, 100% corporate taxation exemption and 100% import and export taxation exemptions.
The result of the increasing popularity of Dubai, both in tourism and as a commercial trading environment, has inevitably resulted in a large increase in the population. Today, over 1.5 million people live and work in the emirate, which has only served to increase the demand for all types of property in Dubai, both on a short term and long term basis.
The changes to the Dubai property legislation, coupled with an aggressive pro-tourism approach saw the demand for property in Dubai increase considerably. Today, investment property in Dubai is still highly sought-after, with investors looking to capitalise on the strong potential for long term growth in the emirate.
So where does the future lie for property in Dubai? At present this is a much debated topic, with many people pointing to a cooling of the economy at the turn by 2010 as more new real estate comes online in Dubai. Outside of this however, many other indicators seem to be pointing towards an increasing growth in the region, as the developments in the infrastructure allow for increasing numbers of residents and tourists.
Today, there is an exceptionally strong market for property in Dubai, and assuming that investors carry out the appropriate ‘due diligence’ on their property investment, it is highly likely that Dubai will deliver strong returns for many years to come.
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