Top 10 Locations for Overseas Property Investment - 8

Country:  Abu Dhabi; Ajman, United Arab Emirates; Dubai, United Arab Emirates; Ras al Khaimah, United Arab Emirates; UAE

UAE Property

UAE property has appreciated significantly over the past six years, as the country actively tries to reduce its reliance on oil, by diversifying economically into the financial services and tourism sectors. It is projected that over £100 billion worth of new property developments will be built in Dubai alone by 2020.

It was Dubai property that kick-started the region’s boom back in 2002, when the government developed a strategy aimed at encouraging foreign investment, supported by the liberalisation of foreign freehold property ownership. The emirate’s property sector has since witnessed robust growth, culminating in vast capital growth, and high rental returns. However, there are signs that the market is now running out of steam, with an oversupply of homes. Morgan Stanley project a property price correction of at least 10 per cent by 2010, while the latest quarterly residential report from rental group Asteco shows that rents in Dubai are starting to plateau.

The smallest and least developed emirate of Ajman has been feeling the domino effect from Dubai’s property market, particularly along the Emirates Road. The prospect of a lucrative Ajman property investment and high returns have been attracting a growing number of property investors. But recent problems obtaining and renewing visas is deterring many would be investors, causing off-plan prices to now fall.

The fast growing capital of Abu Dhabi is the richest and largest of all the seven UAE states. It is fast establishing itself as a major tourist destination, and is spending billions of pounds on infrastructural improvements. This is causing a massive Abu Dhabi property surge and housing supply constraints, culminating in strong capital growth. But much like Dubai and Ajman, a short-term slowdown looks to be on the agenda.

Ras Al Khaimah has great investment potential and is rising in popularity due to its low land costs, picturesque landscape and booming tourist sector. Prices of property in Ras Al Khaimah are appreciating at a rapid rate, yet they remain a lot cheaper than average prices in Dubai or Abu Dhabi. 

There is no doubt that the UAE is being affected by the global financial crisis. Liquidity is as important to this market as it is elsewhere, and the inflow of foreign capital is slowing, culminating in a sharp property market slowdown.

Although there are less property investors, the country’s property market is still expected to propel to greater heights over the next few years, with more homeowners now entering into the property bazaar. Consequently, 2009 could very well be seen as a window of opportunity to buy property in the UAE, particularly with prices across many parts of the emirates expected to record a short-term fall, which should leave more room for negotiations. 

First published in February 2009.
Some information contained within this article may have changed since it was first published. Homes Overseas strongly advises you to seek current legal and financial advise from a qualified professional.

See Also:   UAE