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How To Profit When UAE Real Estate Valuations Stagnate
Posted on 01/14/09
When real estate valuations stagnate or even decline there's still money to be made in the United Arab Emirates real estate market. How is this possible? The answers are many and make use of a number of financial principles such as 1) rental income on long term property investments 2) micro-region valuation forecasting 3) property development and demand trends and 4) economic developments.
The view that property is a bad investment just because some of Dubai's residential real estate has depreciated from its all time highs could be better informed for the 4 reasons stated above. There are many different UAE real estate opportunities, some of which are very important to Dubai's economic growth. The Dubai metro rail is scheduled to be completed within the next 2 years and will greatly facilitate the flow of traffic that has increased along with Dubai's economy.
Why are developments such as Dubai's metro rail so important? Because transportation and logistics is a key amenity for residential property and is also an indicator of economic infra-structural development and growth. The Dubai metro rail is just one of many developments in the UAE that quite possibly can directly or indirectly be related to real estate prices and economic indicators. Another example is Dubai's Sports city. Unique sports venues and property may be the real estate investment for investors seeking to bank on potential future sports events that could garner high demand for proximity to sports facilities.
Assessing the likelihood of Dubai's metro rail and Sports city to increase residential real estate near these developments is important in understanding one's UAE real estate investment. Questions about the property should be asked before making any decisions to ensure potential. For example, what is the capacity of the sports facilities in comparison to the surrounding residential property? How many people will the Dubai metro be able to transport and how effectively will this reduce traffic?
When all the right questions are asked and answered, UAE real estate investors may then begin to see the advantage(s) of a real estate market that doesn't look quite so good on the surface. Moreover, as with oil, it's not what's on the surface that matters as much as what's underneath i.e. underlying development factors that affect the UAE real estate market and individual property income potential.
Posted by A.W.Berry
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About me: I am an American with a diverse heritage and have lived in several countries. My work experience and background centers around corporate, marketing and financial areas and my educational background includes a M.B.A. in Finance and Marketing in addition to a M.A. in Philosophy.
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