Neighbourhood Watch: Investors looking for right opportunities

There is probably no market in the world that is as dynamic as Dubai and there continues to be endless projects to whet the appetite of any investor. The creation of the Growth Corridor between Dubai and Jebel Ali is just one of the catalysts that has stimulated the overwhelming private investment that we are seeing today.

There is tremendous value attached to being part of "master planned communities" where the infrastructure is new and overall theming is in place. Dubai has benefited greatly from increased population as a result of people migrating from areas that fail to offer a comparable standard of living.

Investors are abundant and looking for the right project in good locations with healthy returns. They may be witnessing favourable changes in a particular area and would like to capitalise on financing opportunities, or they may simply wish to take advantage of good deals that may not be available in the future.

The coming IMF meeting is just another landmark event that will bring Dubai into the international limelight once again and is expected to positively impact the market.

The buying and selling of property has opened up the doors for boom mode once again. This has touched the population in general, thereby stimulating interest in almost anyone planning to stay here for extended periods.

With freehold sales continuing to be announced, one would expect an even greater increase in this activity. With this rate of growth, there will be an expected softening in certain sectors as demand catches up with the increased supply.

Special deals

As a result, we are seeing special deals, and in some cases discounts, becoming available to buyers if they commit within a given period.

Once people are certain of where they wish to buy, sales will increase and those deals will no longer be available. The finalisation of new real estate legislation will also provide greater certainty and transparency for both buyer and investor.

The rental market has remained fairly stable, but there are some areas that have greater supply than demand and others that have simply lost value as a rental sector.

Locations wane in popularity due to poor zoning, resulting in a cross section of high and low-end properties situated side by side. This naturally affects rental income and property values in general. While the rental market is expected to stay active, rental adjustments will impact most properties.

Entering and exiting the property market always takes a certain amount of courage. It is imperative that land owners and potential investors look to professional advice before they make their purchase or design their building. In this way one avoids – to quote a well-known architect – sketching in concrete and erasing with a jackhammer!

A number of factors can affect the continued success of a market, and an element of sophistication in investment must be present.

Questions abound with respect to the number of new projects and the ability of the market to 'digest' these developments. It is important that new projects be timed to lead market demand but not dominate the market.

While it remains to be seen if the amount of property coming onto the market will be absorbed and in what time frame, it is apparent that the government is committed to the creation of a favourable environment for investment. Hopefully, this support will be the key to the required demand developers need to make the many projects a continued success.

The writer is the UAE-based managing director of Better Homes LLC.