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Dubai real estate a better investment than stocks in the long-term

11.09.2014
Dubai real estate a better investment than stocks in the long-term
According to Colliers International’s report, Dubai’s real estate market has proven to produce better investment returns in comparison to the stock market and has seen a 20% increase from year to year. According to a report published by Colliers International, investment in Dubai’s real estate market has shown to present twofold returns over the long term as compared to stocks. Whereas, on a quarterly basis the Dubai Financial Market (DFM) has out-performed the property market. This has been reported by Emirates 24/7.
DFM has achieved an 18% percent increase in its value in the second quarter of 2014. In contrast Colliers house price index (HPI), which was introduced in 2007 has reflected a 3% increase in performance.  
On the other hand a study of HPI since its establishment, distinctly illustrates that the property market has outdone the DFM. Colliers said that analysis reveal that a property investment in the first quarter of 2007 till 2014 has produced approximately a 70% increase, while DFM has only managed at 30% return.
Colliers analysis also reveals that the scale of growth of property prices has slackened in the second quarter of 2014 and there has only been a 3% increase in opposed to a 5% increase witnessed at the last quarter of 2013 and the beginning of 2014. On the whole, the house index has increased from 165 points in the first quarter to 170 points in the second quarter of 2014. On a yearly basis the blend average of house prices was AED 17, 050 per square metre (psm) in relation to AED 14,434 psm in the first quarter.
With regards to specifics, the annual villa index increased by 26% in the second quarter. However, the quarterly villa index remained stable despite the fact that it has seen a 12% rise in the first quarter of this year.  The annual townhouse index saw an 18% increase and the quarterly index saw a 5% increase. This was a 1% percent decrease from the first quarter.
Ian Albert, Regional Director at Colliers International said that Dubai’s residential property market has seen a 20% increase from year to year. The growth of the market has now adopted a consistent and stable position and is expected to have positive growth in the coming year. This is seen as a result of smart regulations put forward by the government and robust progress of the UAE economy.
Colliers report also states that Dubai Marina has seen maximum transactions in HPI, about 14% percent, followed by Downtown Dubai with 10% and Jumeirah Lake Towers and Motor City and Business Bay at 9% and 7% respectively. At the same time, apartments in Palm Jumeirah have increased by 58% and Motor City by 55%.
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2,350,000
Ref.No: AP670
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1,308 ft2
1,796 AED/ft2
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Lease process (Rent out)
Contract of the lessee and agency.

1 hour

Contract of the lessee and agency.

Required documents:

  • copy of the passport
  • copy of the certificate of ownership
Ad placement

1 day

Ad placement:
  • 20 real estate portals;
  • client base of the agency;
  • profile exhibitions, etc.
Signing of the lease agreement

Up to 2 days

Signing of the lease agreement
Expenses of the seller:

None

Additional services:

Property management

Lease process (Rent)
Contract of the lessee and agency.

1 hour

Contract of the lessee and agency.
Real estate search.

Up to 5 days

Real estate search.

Selection of optimal options.

Signing of the lease agreement

Up to 2 days

Signing of the lease agreement
Expenses of the lessee:

-5% agency commission of the annual contract price

Additional services:

None

Purchase process
Contract of the tenant and agency.

1 hour

Contract of the tenant and agency.
Property Selection

~ 2 weeks secondary

~ 3 weeks new building

Property Selection

Selection of optimal options

Registration of the contract of purchase / sale

1 Week

Registration of the contract of purchase / sale
Customer charges:
  • 2% from purchase at transaction
  • 4% - registration of the transaction at registration
Additional services:

Property management

Sales Process
Contract of the lessee and agency.

1 hour

Contract of the lessee and agency.

Required documents:

  • copy of the passport
  • copy of the certificate of ownership
Ad placement

1 day

Ad placement:
  • 20 real estate portals;
  • client base of the agency;
  • profile exhibitions, etc.
Signing of the lease agreement

Up to 2 days

Signing of the lease agreement
Expenses of the seller:

None

Additional services:

None

the management process
Contract of the owner and agency

1 hour

Contract of the owner and agency
Rendering of management services

1 year

Rendering of management services
Reporting

1 day

Reporting
Expenses of the owner:

5% of the annual rental price

Additional services:

None

Investment Process
Contract of the tenant and agency.

1 hour

Contract of the tenant and agency.
Selection of optimal investment options

From 3 days

Selection of optimal investment options
Registration of the contract of purchase / sale

1 Week

Registration of the contract of purchase / sale
Expenses of the investor:
  • 2% when investing in the secondary market
  • 0% when investing in a new building
  • 4% - registration
Additional services:

Property management