Million-dirham Dubai property question: Location, location, location?
Is it all about “location” when it comes to investing in property in Dubai?
Opinions are diverse: Those with deep pockets look at location and quality, while those seeking an abode to offset rent hikes in future emphasize on price.
Investors are willing to pay a higher price for location as they look for properties that will appreciate over time and will have a good resale value. They seek projects that will always be in high demand due to their key locations. Good examples are in Downtown Dubai and the Palm Jumeirah.
Before the global financial recession, location wasn’t the all important decision making factor – as long as the buyer could flip the property and make a profit, then it didn’t matter how far out from the city centre it is or the level of quality the property was offered. However, when the financial crisis hit Dubai, investors were stuck with properties that were too hard to sell as their prices had dropped significantly.
Since 2008 however, Dubai has seen a huge increase in location-driven investments.
In April, a joint study conducted by the Roads and Transport Authority's Strategic Planning Department and Dubai Real Estate Regulatory Agency found there was high demand for properties closer to the Metro stations which has resulted in their prices soaring by between seven and 34 per cent.
The study had monitored the changes in rates of these lands and commercial properties in 2011 compared to the rates prevailing in 2009 before the opening of the Metro.
Cluttons, an international real estate consultancy, in September said proximity to Metro stations in Dubai is now a factor affecting prices with the majority of areas close maintaining demand and increase both capital and rental values.
US-based Citibank has revealed previously that recovery of Dubai’s real estate sector has been in line with the wider economic upturn and strong economic fundamentals of the emirate.
“Dubai’s economic rebound and improved investor sentiment had breathed life into the real estate market in recent months with the volume and value of real estate transactions carried out in the emirate mushrooming since the beginning of the year,” the bank has said.
International property consultants too have reported villa prices rising by almost 20 per cent year-on-year, while apartment price appreciation have been a tad slow at seven per cent year-on-year.