Real estate Investing

On average, a villa in Dubai will cost around $1,000 per square meter with is cheaper in comparison to western areas like the London Docklands where a square meter will cost anything around $5,000.

The Dubai Government is taking all measures necessary to prevent a shortage of supply and is giving land to developers as an incentive. What appears like massive supply today in Dubai may be nothing compared with demand in a few years time. Dubai is currently growing rapidly, with its GDP advancing 7-8 percent a year and shows no sign of slowing down.

Escalating Building Costs

A strong influence on property prices are raising building costs. With the low US dollar is pushing up the cost of materials from Europe which is pushing energy prices to its peak.

Buy vs. Rent

Any long-term resident will fork out a fortune in rent, and that money is better invested in a property. Additionally, it is up to 40 percent cheaper to buy than to rent, so buying a big villa costs the same as renting a small one. The 10 percent down payment on a new villa is the same as the upfront annual rent payment. Rental yields of up to 10 percent are achievable in Dubai compared to under 5 percent in Central London.

Returns for Investors

Prices for properties in Dubai are appreciating steadily at the rate of 10 percent - 15 percent per annum, (for some developments even greater). It is estimated that by 2009, based on current growth, your initial financial investment is expected to at least double.

Currency Rates

The local currency, AED (Dirham) is pegged to the US dollar (3.675 AED: $1). The recent strength of the pound against the dollar means by investing now, investors are achieving a 10 percent - 15 percent ready equity compared to the same prices a year ago.