The city's busy airport which handles nearly 160,000 flights a year coupled with its ready infrastructure and cosmopolitan milieu are all factors which carry considerable weight in terms of Dubai's investment appeal. The glitzy skyscrapers and luxury villas built on manmade islands have only raised the profile of a city that has long been known as a trading hub in the region.
Properties in Dubai seem to have no problem attracting buyers, many of whom are from neighbouring Arab Gulf countries. Already Dh6.8 billion has flowed into the city's property's sector in the first half of this year, official figures show.
GCC nationals' interest in investing in Dubai is nothing new, noted officials, adding that Dubai has been, for many years, a magnet for traders and a profitable market for properties in the region.
"The Gulf countries' nationals are not new to the property market in Dubai," said Sultan Bin Mejren, Director-General of the Dubai Land Department.
"It goes back to late sixties and early seventies, when Kuwaiti traders invested in Dubai," Bin Mejren told Gulf News.
However, the rate of Gulf nationals' investments in Dubai has witnessed a considerable increase recently, "because Dubai's market is a strong one and they feel their investments will have a [good] investment return", he added.
The increase in investor numbers comes in the aftermath of the fall in property prices as a consequence of the international financial crisis in 2008, consultants say.
"I guess [for] GCC nationals, it is more now a case of prices falling to a level where Dubai is becoming quite attractive," said Dubai-based Craig Plumb, head of research for Mena region at Jones Lang, a financial and professional services firm specialising in real estate services and investment management.
Other consultants shared similar views.
Before the crisis, the prices of properties were "inflated beyond expectations", another consultant in Dubai noted privately.
But after the crisis played out — temporarily halting many projects — prices were adjusted.
Property prices also fell further with the increasing number of units coming onto the market, consultants added. The property market is bottoming out at present, experts say. A major factor advancing Dubai's property market is the high quality of infrastructure: well-built roads, a Metro system, a massive modern airport that opens up access to the entire region and all corners of the world, besides a wide variety of houses and villas, and an active commercial environment.
During the first half of this year, Dubai International airport recorded the busiest six months in its 50-year history with 24.6 million passengers, making it the world's fourth busiest airport in terms of international passenger traffic. This figure compares with 22.6 million passengers in the corresponding period in 2010, an increase of 8.9 per cent.
"So it is a combination of factors that is attracting investors into Dubai at the moment," said Nicholas MacLean, managing director for Mena region at CBRE, a global full-service real estate services company.
Simplified and streamlined regulations in Dubai have also helped to attract investors, consultants noted, praising the current level of transparency with respect to property laws.
The emirate has also recently introduced more incentives for investors. Last June, a UAE Cabinet decision was announced to extend visas for real estate investors to three years instead of six months.
"Less regulations you have, the better it is for the market," commented a consultant on Dubai's efforts to lure investors at a time when other investment destinations in the world are striving to achieve similar results, such as Singapore, Doha and King Abdullah Economic City in Saudi Arabia.
Saudi citizens lead among Gulf investors in Dubai, who, instead of travelling to faraway countries to invest in property, many prefer to come to Dubai, either to buy a house to spend vacations in. Some others even opt to move their whole business to Dubai and shuttle between the UAE and Saudi Arabia.
"A few months earlier, a Saudi friend of mine said all the nine daily flights to Riyadh or Jeddah, I can't remember exactly, on A380s were fully booked," recalled the consultant.
"This shows the high number of travellers between the two cities," and the great potential for closer economic links.
But Bin Mejren believes all the Gulf societies are similar and what distinguishes Dubai from other cities is the large choice of properties, ranging from hotels, apartments, villas, and other buildings.
According to Bin Mejren, the percentage of Gulf national investors involved in the transactions recorded in the first six months of this year reached 23 per cent, with investment totalling Dh30 billion — the break-up being Dh16 billion for residential apartments, Dh12 billion for land and Dh2 billion for buildings.
Official figures put the number of Gulf national property buyers in Dubai in the first half of 2011 at 1,950.
According to figures released recently by the UAE Ministry of Finance, the number of registered real estate contracts by Gulf nations in the UAE increased to 4,604 in 2010 from 4,024 the previous year.
In terms of residential properties, Gulf nationals generally prefer luxury and upper-end villas and apartments, in "projects that are completed rather than projects that still under construction", said Plumb.
Many Saudis, Kuwaitis, Qataris, Omanis and Bahrainis now are spending their vacations in Dubai, which fulfils the requirements of family tourism with its giant shopping malls, several water theme parks and a wide range of hotels.
Meanwhile, the number of tourists from the Gulf countries witnessed a noticeable increase this summer, especially with Ramadan coinciding with the summer break.
Dubai, explained MacLean, offers plenty of activities for people of different interests from a GCC investor's perspective.
"We see the highest level of occupiers' activity is in Dubai, particularly among international businesses," said MacLean.
So, many companies establish their regional headquarter or expand their operations from Dubai to cover the whole Middle East and North Africa region.
As for commercial and retail properties, most Gulf nationals prefer to rent a space rather than purchase it. They share this trait with investors from other Arab countries.
There are investors of nearly 150 nationalities are investing in Dubai's property sector, noted Bin Mejren.
Among non-Arab nationals, Indians and British investors top the list, which also includes people from Iran, Pakistan and Afghanistan, officials and consultants said.
According to MaClean, After the Gulf national investors in the commercial sector, come the Indian buyers, "but also the European buyers are coming back to the market place because they see value in the market".
The European buyers are coming back "for the first time in three years", Maclean added.