Those looking to diversify their real estate portfolios into holiday homes should take a hard look at the United Arab Emirates (UAE). Prices have fallen from their previous highs due to oversupply brought about by aggressive construction, and exchange rates are favourable, with the drop in prices of the UAE’s main export, oil. Furthermore, since the real estate market was liberalised in 2002, foreigners have been able to purchase property in the UAE without restriction.
Folks who have yet to visit the UAE’s capital city of Dubai often find it hard to imagine the scale of the construction there. It is often jaw-dropping, with a purported third of the world’s construction cranes located in the country. Some of the most impressive construction in the world takes place in Dubai, such as the archipelago Palm Jumeirah, created by an amazing feat of land reclamation.
The Burj Khalifa in Dubai is currently the tallest building in the world
The Burj Khalifa, the world’s tallest structure at the moment, is located in the heart of Dubai. Designed by renowned architects Skidmore, Owings and Merill, the same folks behind the upcoming Tanjong Pagar Centre in Singapore’s Central Business District, the building is a destination in and of itself. A mixed development with offices, retail, restaurants and residences, it was featured in key scenes in the 2011 movie Mission Impossible: Ghost Protocol.
Furthermore, the UAE is a haven for shoppers, with no sales taxes on transactions. Both tourists and locals alike get to enjoy tax-free shopping, with many travelers taking advantage of the exchange rates to purchase luxury labels as well. However, with oil incomes on the decline, the UAE is considering implementing a sales tax from 2018 onwards, so tourists should definitely visit before then.
There are several sand buggy adventure tours in Abu Dhabi and Dubai
Thrill-seekers also have plenty to enjoy in the UAE. A popular activity many tourists enjoy is to ride in the sand dunes in a buggy, or a quad bike. For the ultimate thrill, there’s nothing quite like skydiving – jumping out of an airplane and plummeting towards the Palm Jumeirah, before the parachute opens and buoys you to safety.
For foreigners who want to enjoy the lifestyle that the UAE has to offer, there are a variety of holiday homes in the market at the moment. As is characteristic of the UAE, many of the homes marketed to foreigners are luxury villas and high-rise penthouses. However, for those with deep enough pockets, these products are not only a status symbol, but also a good source of capital appreciation.
Currently, developers are highly motivated to sell, and have offered attractive incentives, such as discounts and rental rebates. Rents however, are on the decline, as expatriates in the oil and gas industry have been hit by the global decline in the commodity’s price.
However, many investors who are looking to monetize their holiday homes often turn to short term rentals, giving them the flexibility of using the property as a holiday home, or earning rental income when they are out of town. While services like Airbnb were previously illegal, it seems that the UAE has since allowed homeowners to rent out their homes to tourists, if they were to apply for a permit issued by the Department of Tourism and Commerce Marketing.
Before you purchase a holiday home, it’s best to check out the location yourself. Plan a flight to Abu Dhabi or Dubai with Wego at http://www.wego.ae or to neighbouring Saudi Arabia at http://sa.wego.com
This article was written by Chang Hui Chew, Content Marketing Manager at PropertyGuru.