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Property Investment in UAE (Dubai) 2008

Situated on the Persian Gulf between Saudi Arabia and Oman, the United Arab Emirates (UAE) has a thriving economy and a booming tourist industry attracting interest and investment from around the world.

The importance of tourism has grown rapidly in the UAE, with luxury facilities, unrivalled weather and easy access attracting visitors from around the world, and accounting for 0.5% of total tourist demand worldwide. The UAE tourist industry is forecast to generate $33,920 million in 2007, growing to $53,330.6 million by 2017, with total demand expected to grow by 9.5% in 2007 and 4.9% per year until 2017.

The most popular destination of the UAE is Dubai, whose immense commitment to tourism is clear. According to the Dubai Development and Investment Authority, tourism is the fastest growing sector of Dubai's economy, with 11.6% of its GDP invested into the sector, representing no less than $1.9 billion of economic activity.

The federal capital, Abu Dhabi, has some of the finest visitor facilities to be found anywhere in the world, including modern infrastructure, extensive shopping complexes, and state of the art tourist attractions. With $1 billion a year allocated to tourism related projects for the next ten years, these facilities are set to improve greatly, attracting ever more tourists, and fuelling demand in the property market.

"The UAE tourist industry is forecast to generate $33,920 million in 2007"

Illustrating its ascendance onto the world commercial stage, the UAE attracted $12 billion in foreign direct investment (FDI) in 2005, the most recent year for which official figures are available, moving up from 90th in the world during 1993 to 1995, to 15th in the world between 2003 and 2005, according to Shaikha Lubna, The Minister of Economy.

Investment into Dubai's real estate sector has increased substantially from £1.6 billion (Dhl1 billion) in 2000, to £23.7 billion (Dhl65 billion), and is forecast to rise to £26.4 billion (Dhl84 billion) by 2010. This will mean Dubai's real estate investment will contribute 35% per year to the Emirate's GDP over the next 5 years, according to the Department of Tourism and Commerce Marketing, Government of Dubai.

Recent changes in property law mean that foreign investors can now buy freehold property in parts of Dubai. A highly favourable tax regime has seen Dubai rise to prominence as a financial centre of excellence, while the government has further enhanced the economy through the creation of nineteen free trade zones, including Dubai Internet City, Dubai Media City, Dubai International Financial Centre, and the Airport Free Zone.

The authorities in Abu Dhabi are encouraging foreign investors with a range of incentives, including capital protection facilities without any restrictions or conditions.

In summary, the UAE has all the ingredients for very promising property investment; a booming tourist industry backed by massive government investment, a thriving economy backed by very favourable tax conditions, and a growing workforce of highly paid, tax-free expatriate workers who need accommodation. Whether you are looking for capital growth or rental yield, there are excellent prospects for property investment in UAE (Dubai).