According to Mikhail Kruzhov, branch manager of DubaiProperty.ru, despite the emergence of new large-scale projects on the coast, buyer interest in The Palm Jumeirah is not waning. On the contrary, its relevance for investors has even increased. This spring, The Palm Jumeirah began to be populated (for example, the Shoreline Apartments complex was put into operation), which caused an even greater increase in prices. Thus, since the end of 2006, apartments here have risen in price by about 20%. Currently, apartments on the 'trunk' of the island are close in cost to housing on the first line of prestigious coastal areas such as Dubai Marina and Jumeirah Beach Residence (for example, in the Golden Mile complex, prices start at $380,000). An even more exclusive area is the crescent surrounding the island (The Crescent). Housing on this outer part of the Palm is estimated at 30-40% more expensive than similar properties on the trunk and coast.
In general, not only the island, but also all of Jumeirah as a whole is one of the most prestigious areas of the emirate. Here, in the coastal resort zone, not only is the huge residence of the sheikh’s brothers located, but also the famous five-star hotel complex Madinat Jumeirah. Any project that has this word in its name can be considered elite. There are already quite a lot of them here: these are 36 skyscrapers of Jumeirah Beach Residence, located a little further west along the coast (studio apartments from $230,000).
Further from the bay are the Jumeirah Lake Towers complex (apartments from $140,000) and the Jumeirah Islands village (villas from $1,400,000) – housing around artificial lakes. The news of this year was the decision to build housing permitted for sale to foreigners directly near Madinat Jumeirah and the sheikh's residence (Acacia Avenue complex; price not yet known).
Apartments are generally more popular than villas due to lower operating costs. However, from an investment point of view, a villa may be more attractive. On the same Palm Jumeirah, detached houses have risen in price by almost 100% over the past six months. Of course, even in Dubai, the result depends on the specific address. On the less popular island of The Palm Jebel Ali, villas are on average half the price. The same situation applies to other areas of low-rise coastal development. The only competitor to Jumeirah's island villas on the shore is the exclusive golf project Emirates Hills (often called the 'Dubai Beverly Hills'). Private residences here are sold even more expensive.
According to experts, citizens of CIS countries account for at least 10% of home buyers in Dubai; for certain described complexes, their share is even higher. Mohammed Binbrek, Executive Director of Dubai Properties, gave a lower figure: 15% for all CIS and Western Europe. The formula by which expensive Dubai hotels currently operate indirectly supports the first version: 10% of staff must be Russian-speaking.
While construction in Dubai is mostly unfinished, it is difficult to obtain accurate information. Developers are not required to report such data, and information on the nationality of owners will appear in the Dubai Land Department register only after the facilities are put into operation. Within the next year, a sufficient amount of housing will be commissioned, and the picture will become clearer.
As for the aesthetic preferences of our buyers, they usually avoid traditional Arabic architecture. From the entire range of architectural styles (and the islands even offer stylized Polynesian bungalows and Indian palaces), our compatriots still prefer modern and Mediterranean architecture. Sometimes they are interested in the national composition of the complex's residents, but this factor has almost no influence on their choice. For those planning to live and relax in Dubai, atmosphere is more important. If earlier they had to rely solely on the seller's PR materials, now the character of the area can be felt on one's own.
Many areas of New Dubai are fully built up and populated, in particular Spings, Greens, Medows, Emirates Hills, Arabian Ranches, Gardens. In a couple of months, Jumeirah Beach Residence and International City will be put into operation. Dubai Marina and Burj Residence are partially built up and inhabited, and finishing of several towers in Jumairah Lake Towers is being completed. Among the large office development projects, one can mention the Saba Tower, where owners are already renting out space.
The interest of our investors in offices appeared relatively recently. Earlier, there were few projects available for sale to foreigners, and prices in this segment moved more slowly compared to housing. However, in 2006, there was an almost twofold increase, caused by the growing needs of tenant companies. 74% of the GDP of the emirate of Dubai is currently provided not by the raw materials or industrial sectors, but by various services. In the wave of economic growth, many new companies are opening here, and entire groups of 'white-collar' workers are literally being imported from different countries. As a result, a square meter that can fit a desk has begun to bring owners double or triple the income in a short period. If two years ago, office rent in one of the business centers on Sheikh Zayed Road (runs parallel to the sea at a distance of 1-2 km from the coast) was $600-700 per sq. m, now it is at least $2,200-2,600. It is believed that in terms of office rental costs, Dubai has now taken third place in the world – after London and New York.
Naturally, the market responded to the deficit with a multitude of offers. Offices are selling and being built well everywhere in Dubai – both in business parks and in recreational areas. There are both mono-functional and multi-functional buildings. Mixed-use development is very common: retail spaces are planned on the lower levels, then come 20-30 'business' floors, above them about the same number of residential floors. The tower is crowned by a club space for residents and guests of the complex or a private penthouse. Among the recent offers on this topic, one can note the Rolex Tower on the same Sheikh Zayed Road (a Chicago architectural project under a Swiss brand) and the project with the Japanese name Kaizen One next to the prestigious residential area Jumeirah Village. Naturally, Dubai's Manhattan, Business Bay, also a mixed-use area, does not lose its appeal.
Information that an acquaintance made good money on the growth of the Dubai market sometimes leads to hasty purchases. Hundreds of options are offered, and to choose one, you need to clearly articulate your needs to the seller. There cannot be universal properties that would be suitable both for quick high-yield speculation and for long-term investment, and also serve as ideal seasonal housing for a family. For each case, there are its own optimal time 'entry' and 'exit' points, areas, and quality level of properties.
The second important point is the choice of the developer company. For an inexperienced buyer, the offered properties may not differ too much. Meanwhile, they can be built both by giant companies with a well-known regional name and by young structures for which this is their first or second project. Some developers are very picky in choosing partners and require substantial sales volumes to conclude an agency agreement (the presence of properties from Emaar, Damac, Dubai Properties and other large structures in the seller's database is a positive sign). The smallest ones, on the contrary, are happy with any agent and do not terminate the contract even in case of zero sales volume.
Are any negative scenarios possible? As in any market, one cannot completely rule out the possibility of long-term construction, product quality not matching the stated specifications, and in extreme cases, bankruptcy. However, with buyers of housing from well-known developers, whose investment volumes amount to hundreds of millions of dollars, such troubles have never occurred.