Realty Talk: Dubai from a UK perspective

Isn't technology a wonderful thing? Here I am in the United Kingdom at 2 in the morning writing this article.

Yes, I am back visiting friends and family along with probably half the British expats who have come here from Dubai.

I had a very interesting conversation with a friend of mine named Phil a couple of hours ago. He is a professional independent financial adviser and has a substantial client bank of fairly wealthy individuals, some of whom have bought property overseas.

I have been trying for the past couple of years to encourage him to recommend that his clients come to Dubai to consider buying property there.

He is a sceptic and his response has always been: how safe is it buying in Dubai? I told him there are no major pitfalls other than the fact that there is no absolute freehold title at present, but that this has not really affected the market in any noticeable way.

He made a very interesting point that even though in the United Kingdom you register the land and have absolute freehold title over it, the land can still be taken back off you, for instance if the government wishes to build a motorway through it or build an airport, etc.

They will obviously compensate you for it, but you would have to give up your home.

He also asked me if the tsunami had had any effect on people buying on The Palm and other waterfront properties. I have to say I have not really come across this as a main stumbling block for buying in Dubai, after all disaster could strike anywhere in the world.

I showed him in greater detail the main developments going on, including the Burj Dubai the recently proposed Dubai Waterfront project, Business Bay and International City.

Phil then asked me how long the trend to buy will likely to continue, what about the oversupply of property as they are building like there was no tomorrow?

He was astounded to learn that only 8,000 units have so far been completed, namely the Emaar Springs, Meadows and Dubai Marina projects.

By the year 2008 still only 84,000 units will have been delivered, yet it has been estimated that by the year 2020 as many as 500,000 units will be needed to house residents.

How can that be? He asked curiously. I went on to explain that Dubai is the world's fastest growing city and the development of the free zones such as Internet City, Media City, and DIFC, etc. has attracted many multi-national corporations.

Out of the global 500 companies nearly 140 have a presence in Dubai which includes 9 out of the top 10.

With the tax-free status and the superb standard of living, more and more people are becoming long-term residents, and naturally wish to buy their home rather than rent it.

Property prices are on a par with Mumbai and Singapore, but well below the United Kingdom, Hong Kong and other international markets.

The price per square metre in the London Docklands area is around Dh18,000 compared to Dh4,000 in Dubai, so the potential for growth in the property market is still huge.

Another important factor is that when foreigners are buying property through the main developers, a residency visa is usually granted which allows people to stay in Dubai without the need for a working visa; this means that they can now retire in Dubai whereas earlier they would have had to leave the country if they were not working.

The fact that Dubai intends to become the number one tourist destination will result in people buying property here as holiday homes.

Take the Dubai Mall which will be the world's largest mall at 837,000 square metres, the size of 50 international football pitches, this is expected to attract more than 35 million visitors in its first year.

Then you have Dubailand which will incorporate a theme park larger than Disney World in Florida, attracting the families with younger children, not to mention the ski-slopes.

Put this all together and Dubai cannot fail to attract potential holiday homeowners.

For me Dubai is the place to be and the only place to buy property. I cannot see any real downsides over the next 10 years.

The writer is managing director of Best Value Property Consultants.