Dubai Real Estate Hype

[Malren]

Hi all,

I got to visit Dubai last month and I was amazed by the city. I found it fascinating, what they managed to build in such a short time and adding to that their vision and plans for the next 10 years, it’s just incredible.

I was also impressed by whats going on in the Real Estate Market there. The ROIs, prices compared to other prime cities in the world, etc. make it an attractive destination to invest in.

Was wondering what are your thoughts? Does anyone have any past experience?

[mrricks]

Resident Visas can be a problem.
Property is not owned, but are 99 year leases.
Apartment buildings have a twenty year life span, so whatever you buy will be gone in twenty years without compensation.
The rule of law and the universal laws of physics do not apply in the Muddle East.
As a foreigner, you have few rights.
There’s no place like home, especially if investing in real estate.
This from 15 years in the UAE, 7 years in Saudi Arabia, and 7 years in Iran.

[Moondoggy]

Originally Posted by mrricks

Resident Visas can be a problem.
Property is not owned, but are 99 year leases.
Apartment buildings have a twenty year life span, so whatever you buy will be gone in twenty years without compensation.
The rule of law and the universal laws of physics do not apply in the Muddle East.
As a foreigner, you have few rights.
There’s no place like home, especially if investing in real estate.
This from 15 years in the UAE, 7 years in Saudi Arabia, and 7 years in Iran.

Amen

[GoingPlaces]

Dubai is very attractive however for reasons posted above, not ideal. Not to mention the air quality is horrible.

[HHIslander]

Originally Posted by Moondoggy

Amen

x2

I’d stay far away unless you already have someone on the ground with an established RE record whom you fully trust and are also planning to spend a great deal of time there. Personally, it’s just about the last place I’d invest for the above poster’s reasons and more.

[superdog]

Note to self.

Do NOT entertain investing in Dubai RE.

[aczaja10]

Originally Posted by superdog

Note to self.

Do NOT entertain investing in Dubai RE.

Hahahaha

[77T]

I don’t know the RE side per se, but the UAE is a very new concept (new in terms of governance models). For that reason, the investment risk model for foreign capital demands a very high return.

The Emirates model could change, or the investment could gain negative optics, or the wrong sheik takes offense. Then your asset could be subjected to an “involuntary conversion”.


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[OG1982]

City built in record time, using slave labour. No thanks.


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[brandrea]

Originally Posted by mrricks

Resident Visas can be a problem.
Property is not owned, but are 99 year leases.
Apartment buildings have a twenty year life span, so whatever you buy will be gone in twenty years without compensation.
The rule of law and the universal laws of physics do not apply in the Muddle East.
As a foreigner, you have few rights.
There’s no place like home, especially if investing in real estate.
This from 15 years in the UAE, 7 years in Saudi Arabia, and 7 years in Iran.

Thanks for sharing your experience

I’m genuinely curious why the apartment buildings have a twenty year life span. Can you expand on this please?

[Sjmoore11]

Interesting comments. I work in Saudi Arabia and travel to Dubai fairly often. Has crossed my mind to look at real estate there but I’m still a long way from actually getting serious about it.

[Gladiat0r]

Originally Posted by mrricks

Resident Visas can be a problem.
Property is not owned, but are 99 year leases.
Apartment buildings have a twenty year life span, so whatever you buy will be gone in twenty years without compensation.
The rule of law and the universal laws of physics do not apply in the Muddle East.
As a foreigner, you have few rights.
There’s no place like home, especially if investing in real estate.
This from 15 years in the UAE, 7 years in Saudi Arabia, and 7 years in Iran.

Wow this is an eye opener…

Not serious, but I was looking at a few condos there for the slight chance in the next 10 years or so I’d like to invest there. If ALL property are truly subject to 99 year ground lease/leasehold and apartments have a 20 year term, then they can shove it! Hard pass on anything with terms like that.

[mrricks]

Originally Posted by brandrea

Thanks for sharing your experience

I’m genuinely curious why the apartment buildings have a twenty year life span. Can you expand on this please?

The intense heat rapidly degrades the materials in the buildings, so buildings are designed to only last a couple of decades.
The owners also want a relatively quick turnover so they can profit off the same property repeatedly.

[Monolith]

Long time passive reader but have to jump in and share my experience. I have been living in the UAE for more than 5 years already. Lived 25+ years in central Europe before moving here.

Few clarifications:

NOT all real estate properties here are leasehold here. Please double check all the available information and educate yourself first. Dont rush. NOT all areas and properties are profitable. Like always and anywhere. There are 2 types of the ownership here: Freehold (no restrictions here, you can buy, sell, rent and it’s yours, that’s it) and Leasehold (again a few options here, can be 50, 99 years, etc.) Most of the properties being sold here now ARE FREEHOLD properties.

There are several ways how you can invest and gain profit from any growing market in general:

1. Flipping (buying the property before the reconstruction, doing all the renovation works, fit out with the new painting, furniture, etc. Selling for the higher price.

2. Rent. Long term (yearly rent), mid (monthly) and short term (up to 1 week, similar to AirBnb). Yes this is also an interesting option.

3. Offplan properties buying and selling. Offplan is the method of buying the property with the payment plan usually with the 0% interest on the construction stage. Its not mortgage, mortgage is usually taken for 20+ years with the interest rate. Offplan is usually for 3-5 years. You pay deposit around 10% and then you have the payment plan before and after the handover. Can be 40/60, 50/50, 60/40, etc. So you pay for example 5% every quarter. There are also payment plans when you can pay 1% monthly after the deposit. Due to the high interest you can resell your property after 30% payment and gain profit. There is high interest for the best projects here. For example there are only 120 units available for some projects but 3000 interested clients. Again NOT ALL projects are high quality with good ROI (location, developer, etc.)

Again you can easily check all the data online. Dont believe everything what you will hear. Do you own research and work with the reputable companies only. Don’t invest everything in one option only. Diversify your portfolio.

Also one comment regarding the resident visa. It’s not problem at all for most of the countries. You can get resident visa for 2,5 or even 10 years. Because of the job, real estate or other investments or your own company ownership. There are many options.

I will be more than happy to answer any more questions here or via PM. Do not hesitate to contact me or ask here.