British Demand High for Second Homes in Dubai

Residential real estate is attracting an increasing level of investment from the UK, as the introduction of new land ownership rights and a favourable rate of exchange draw buyers’ attention away from the more traditional destinations.

The current strength of the pound against the dirham, together with the introduction of freehold ownership rights for foreigners in certain areas, have boosted the popularity of residential real estate in the emirate among UK buyers. Many investors are those who, as they approach retirement age, are looking to invest in a second home in a sunny climate, and who at one time would have been likely to purchase in the likes of Spain or France. Dubai is a viable alternative due to its warm climate and relative accessibility, as it is just a four-hour flight from the UK.

However, there are still concerns among some buyers about purchasing in Dubai. The extent of construction raises the prospect of supply exceeding demand, and the price of the property going down accordingly. In this case, buyers are advised to only purchase high quality apartments, which are likely to hold their value better if the supply exceeds the level of demand.

Up to now, the demand from institutional investors has been comparatively low, and it is predicted to be approximately another five years before such investors move into Dubai. This sector of the market is likely to pick up when the supply of residential and commercial property allows for long-term leases.