Invest in Dubai

Why Dubai?
Dubai has also been lucky with its timing. Low interest rates and dismal stock markets are good news for realtors.
There is another good reason why Dubai property is a success. Because the Dubai government is behind the housing boom, and has secondary motives such as attracting wealthy immigrants to the city, villas and luxury apartments are sold very cheaply.
One way to judge if real estate is cheap, or not to watch the performance, or rental return. In the case of Dubai a basic yield of 10% on residential property compares with a local mortgage rate of 6.5%. Now in London 3-4% would be considered a good performance right now, so 10% implies a considerable underestimation of property.
Of course, increasing the supply of property may reduce yields in Dubai. However, it will take some time. Buyers of apartments on Palm Island will not actually move in until the end of 2006.
Indeed, the problem is rather the reverse in Dubai. The supply of property is not keeping pace with demand. A city with a growth rate of GDP of around 8% sucks in new people all the time and has a growing demand for housing.
This means that the values of villa and apartment ratchet still rising further that tenants take possession. For the sake of saving time currently in Dubai looks like a winner infallible, if you can find a property to buy.

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