Full guarantees secured

21.02.2016
This week first in Dubai real estate market’s history property investors were given the fullest ever guarantees on their real estate investments plus to a substantial discounts given to some of the Dubai landlords by the market’s major developers.

What are the main worries of any person thinking of investing in real estate? The first concern is always about return on investment. And Dubai major developers have proved to guarantee their property buyers everything that can be guaranteed.

Damac was the hero of the week with its offer for a return on advance payments during the construction of its projects. Off-plan property investors will be granted a 3% guaranteed annual return on investments until the project’s completion. Given that this rate of return is twice the average rate for fixed bank deposits, investing in Dubai real estate is becoming more and more lucrative option.

But this is not the only good news for real estate investors. The biggest annual lease yields of about 8% are also guaranteed for some of the Damac’s projects for the first three years after construction. And even more, the Damac Capital Guarantee guarantees the property's value for two years after delivery. The company said it will pay the difference to the investors if the unit price has any decline between the time of delivery and the end of 2019. Besides, Damac also offers a 10% discount on service charges for some of its luxury properties.

Meanwhile, in the segment of luxury villa rents, ROI are believed to go up, experts from Asteco revealed this week. Since 2010/2011 lease rates is this sector of Dubai real estate are up by as much as 71, 43% for The Springs community and by 29.44% for The Meadows community, giving an average of 5.5% rate of return due to slightly decreased sales prices for villas and the same rents rates level.

On the front of other market’s segments, the industrial property is making its way ahead in terms of attractiveness for investors. It is certainly a market investors should not overlook, Savills experts emphasized in their latest report last week. Such Dubai industrial areas like Dubai South, Dubai Investment Park (DIP) and Dubai Industrial City (DIC) continually show increasing growth rates in the rental sector, despite the decline in oil prices and general economic conditions. That’s why industrial property in Dubai is regarded as a high-potential investment hub, giving a rather competitive ROI.

Despite the decline in oil prices, Dubai property industry shows all the evidences of a matured market with a diversified economy, strong infrastructure in place, fast growing population in sync with a growing demand for quality office and residential accommodation, together with a resilient regulatory legislation giving a reliable basis for its sustainable future.

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