Dubai’s Changing Property Market
November 14, 2018
Dubai is a thriving metropolis that boasts a diverse mix of residents from all over the world. This diversity is one of Dubai’s USPs, though it has not always been the case for property buyers. Many of the city’s oldest districts have been classed as leasehold, where land and property can only by UAE nationals. Non-local residents can lease the property for a maximum of 99 years, after which possession is given back to the land owner. It’s worth noting that leasehold ownership only grants rights to the residential property itself, not the land as a whole. If you wanted to make renovations or to knock down and rebuild the home, you would require explicit consent from the landowner before doing so.
Thus foreign nationals in Dubai were better off seeking out freehold areas, where they could purchase property and maintain 100% ownership. This covers many of the current hotspots in the city, including areas such as Downtown Dubai, Dubai Marina and Emirates Hills as well as Dubai’s upcoming residential projects. However, recent years have seen a number of freehold developments being announced in traditionally leasehold areas, adding to the diversity of the property landscape and further strengthening Dubai’s status as a cultural hub.
This change can be seen most prominently in the district of Jumeirah, which is one of the most popular among visitors and residents because of its seaside location and laidback atmosphere. The area is a unique blend of traditional architecture and design motifs with a contemporary global sensibility. However, while the district has had its share of expatriate tenants, foreign investment has not been a real possibility until recently. Given the district’s immense popularity with residents from India, Europe and the US, the shift toward freehold should come as no real surprise.
Jumeirah’s first freehold development was launched back in 2006. The project, known as Acacia Avenues, was subject to multiple delays and as of the present day, still remains incomplete. More recent and promising projects include apartment blocks in the popular outdoor plaza known as City Walk, the island community of Port de La Mer and what might be the most intriguing launch of 2018 – Madinat Jumeirah Living. The latter is located in proximity to the world-famous Burj Al Arab hotel, an area that is considered to be the most prestigious in Jumeirah. It has already proven to be a massive success with very high demand.
Projects such as the above provide both opportunity and incentive to invest in Dubai’s property market. This great news for home buyers, who now have the option of setting up their principal residence in a well-established part of the city and gaining access to all of the excellent infrastructure that comes with it. For investors, this is a chance to put their money into an area that is generally considered to be quite lucrative, with rental yields that start at about 6% and climb to almost 8% in neighbourhoods closer to the coast.
Dubai is a key player on the global stage today and is only going from strength to strength. By reducing the gap between freehold and leasehold and providing more options for foreign investment, Dubai will establish itself as the destination of choice for discerning buyers around the world.