investors looking for value appreciations come flocking back to dubai rental property post-recession

Investors looking for value appreciations come flocking back to Dubai rental properties

post-recession

The month of May marks a watershed moment in the realty market and Dubai rental properties segment. A decade ago in the same month, a landmark judgment was passed that henceforth allowed foreigners in Dubai to own properties in their name. Until then, foreign ownership of properties (commercial or rental) was not permitted in Dubai. Since May 2002 however, the realty sector in Dubai has seen unprecedented highs in capital gains along with a low point or two.

The widespread panic that had set in, over the past year and a half, has been showing signs of blowing over. Many an expert was found to be exhorting investors and residents on the robustness of their investments. Referencing back to their cyclic nature, a few experts even tried to remind everyone of the phases of appreciation and value corrections that are witnessed in Investments of every form, around the world.

However, the situation in the Dubai realty segment played out slightly different. Thanks to the freehold law that permitted foreigners to purchase apartments and villas in Dubai, there was a lot of goodwill generated in the market. People were convinced of the strength of their investments and sentiment was high on the inelastic nature of the realty sector.

This explains the relatively steady growth patterns that were observed in the first five years since the freehold law came into effect. Demand boomed and rates soared in the following two years as people flocked to Dubai like flies to a light bulb in the dark. The dark clouds of recession that were looming over global skies played their part in bringing a slump in the market. Some say that the property market had been blown up to unsustainable proportions and that the recession was just the trigger. Others are of the view that it was recession indeed that spoilt the merriment and killed the party atmosphere that had been built up.

Whatever side of the fence one may find themselves on, few would disagree on the observation that the Dubai realty sector is showing significant maturity in the past year, as it slowly recovers from the global slump. Foreigners and locals looking to make a smart investment by purchasing houses for rent in Dubai do have certain locations to pick and choose from.

People who purchased properties as the freehold law came into being have seen their investments fetching handsome returns. For example, the lavish villas in the popular ‘The Meadows’ community are known to trade hands at over 10 Million Dh, bringing their original owners an almost five-fold appreciation in investment. This sentiment finds resonance amongst investors who picked up properties in prime areas around Dubai. These include well rounded off, vibrant communities such as The Springs, Shoreline Apartments, Palm Jumeirah settlement, Jumeirah Park and Discovery Gardens, to name a few. Those willing to disagree might as well head out to the Dubai Land Department that saw over 6000 investors shell out a shade under Dh 2 Million each for a piece of the Dubai realty scene.